Both my mom and dad are in their late 50s and somehow we never really had stable finances until all of us graduated and got our own jobs. It’s just now that we found out that they don’t have any life insurance to cover their retirement. Most friends recommend term life insurance for parents but I don’t have any idea about it.  Is it really the best choice to consider when getting life insurance for parents of such age? Usually, how much does it a term life insurance cost?

Zoe

Miami, Florida

Buying life insurance for parents is never a pleasant experience with such thought that you are preparing for financial security once one of them dies. It is, however, a necessary action to take to make sure that your parents have policy that would help you alleviate any worries when the time comes.  It is true that most people prefer term life insurance for parents who are in their 50s and older. It usually costs less compare to other types of life insurance. With this age range, most insurance companies are strict and won’t approve insurance coverage longer than 20 years whereas in term life insurance, you could indicate specific time (5,10,20 years) of policy to outlast your parent’s projected life span. You should take note though that term life insurance for elderly persons are quite expensive and offer lesser years compared to those offered to younger individuals. The policy usually doesn’t offer any equity so you get what you pay for. If your parents outlast the specified time of their policy, they won’t get any money back. Also, make sure to select a policy that is renewable, so you can opt to renew their coverage once such coverage expires.

Make sure to ask the necessary questions when buying term life insurance for your parents. Talk with your parents about any other financial obligations and debts that they may leave behind. You have to consider the overall purpose of the life insurance before purchasing one. A $10,000 insurance policy is usually enough to cover burial costs, but if there are other obligations, you need to calculate for the amount enough to compensate for in terms of future medical obligations, unpaid loans and mortgages and other costs. This insurance should be enough to secure both you and your parents from any financial loss in the event of their death.

Which type of policy should I go to? Should I buy a term life insurance policy or a whole life insurance policy?

Tyler

Clarksville, TN

This is a good question. A simple way to answer this is to determine what kind of life insurance coverage suits your needs as well as that of your family/dependents (beneficiaries). First, let’s take a look at the difference of a term life insurance versus whole life insurance:

Term Life Insurance

Pros: Provides significant face amount (death coverage or protection) for relatively affordable life insurance premiums. You can choose between 5, 10, 15, 20, up to 30-year life insurance terms depending on your needs. Term life is rarely offers anything else other than pure life coverage. This is great for people who only need coverage for a certain period of time (e.g. raising children or paying-off mortgage).

Cons: Can be very expensive to renew especially for longer term policies. It will depend on the particular life insurer if they will allow you to renew a term policy. Also, term life does not accumulate value in the long-run since there is no cash-value feature present.

Whole Life Insurance

Pros: Provides permanent life coverage that also offers comprehensive coverage features like cash-value. Cash-value accumulates wealth in the long-run and can even earn tax-deferred income. The owner may also borrow from the cash-value or liquidate the policy for its surrender value.

Cons: Definitely more expensive compared to term life but only because a portion of your premiums go into cash-value. Expect to pay expensive premiums in the initial years of the coverage. This is also not the best option if you’re looking to grow your money through investing.

The Verdict

Each kind of coverage has their own advantages and pitfalls so choose the policy that best suits your needs, your financial capacity and goals, and how long you see yourself needing life coverage.

Tags: term life insurance versus whole life insurance

I heard there are life insurances that can give me coverage for a certain period of time. I’m going to be working in what I see as having a hazardous environment for a short while. Can you give me the term life insurance definition?

Miguelito

San Diego CA

An insurance coverage that will be in effect for a certain period of time. That’s the term life insurance definition. You see, Miguelito, you’re in the right track. You said you’ll temporarily be assigned in a job that you consider as having a risky environment, and thus, you need a life insurance in at least that short duration of time to ensure the financial stability of your family just in case you will die on the job.

By the term life insurance definition itself, this type of insurance is renewable. Although it may be renewed without giving an evidence of good health, premiums on renewed policies are often higher than the previous ones. This is due to the increased risk of death at a higher age.

Further basing on the term life insurance definition, people usually purchase this type of insurance for short-term purposes such as to cover them until their children become adults or until retirement. You should note, however, that you won’t be receiving any benefits from this type of insurance if you don’t make any claims against the policy while it is still in effect.

There is also a so-called return of premium term life insurance in which aside from ensuring death benefits to your benefactors when you die, you will receive the premium amount you had paid when you are still alive at the end of the policy term. In short, whether you die or not, you or your benefactor will be able to reap the benefits of what you have spent into the life insurance.

Term life insurance is considered the simplest and the cheapest among the different types of insurance. However, although its premium cost may be low in younger years, it generally increases substantially with the age of the one being insured. For some, term life insurance is purchased to serve as an insurance cover for a loan repayment or post-death liabilities like estate taxes.

I have life insurance coverage through my employer here in California but I don’t think I have enough coverage. What is my best bet for additional life insurance cover without going through a medical examination?

Ivette

Costa Mesa, CA

It’s a good decision to get additional coverage for your life insurance even though you already have it through your employer in California. And since you don’t want to go through a medical examination, your best bet on this is the term life insurance with no exam. This kind of policy would let you buy life insurance coverage without a lot of hassles. This is very convenient because if you opt to go online to purchase your life insurance, you could also obtain an instant quote for term life insurance with no exam and know the fees in just a few minutes. You can get instant life insurance quotes from a lot of insurers prior to making a final decision. You can determine what the policy covers and it that one is what you need.

In case you opt to work with a life insurance expert to acquire all the information, you can get term life insurance with no exam through this as well. You have to let your life insurance representative know that you need a policy that doesn’t ask you to go through a physical exam so as to provide you the right life insurance quote.

Just a little reminder, though, that you may not get the coverage you would with a conventional life insurance policy that requires a medical exam. You have to evaluate and determine if a physical exam will not give you better coverage which would also include health-related deaths. A life insurance expert could help you make a decision on this.

My mom’s been bugging me to help her find the right term life insurance company since she will be getting an insurance coverage soon. I don’t have any idea about life insurance much more about getting it from the right insurance company. Can anyone help me?

Odessa

East Seattle, WA

Sure Odessa!

It’s very important that your mom buys her insurance coverage from the right term life insurance company. And here are what you mom should consider in getting her insurance coverage from the right company:

Complaint History: It’s very important to know whether the potential insurer has a high percentage of customer complaints. As you can see Odessa, the more complaints a certain insurance company gets, the more it tells about what kind of insurer it is. You can check with your state’s office of insurance commissioner to know more about company’s complaint history.

Licensing Status. Of course you don’t want your mom to purchase life insurance coverage from a company that does have the legal rights to conduct business here. To check about this you can also contact the Washington Insurance Consumer Hotline or even check their website.

Customer Service. As a paying customer of course you only want the best service that you can get. To give you a first hand experience on this, call the insurance company’s hotline number. How do they handle prospect customers? Do they keep you waiting for a long time?

Financial Stability. This is very important to make sure that the insurance company can settle its claims. There are published ratings about insurance company’s financial strength, you can check that when you visit public libraries.

Now that you know those things, I’m sure you could help your mom in finding the right term life insurance company. Make sure you know those things by heart!

What’s the most effective way to get cheap term life insurance quotes? I only need life insurance coverage for the next five years, so I don’t want to pay too much! Thanks!

Margot

Cedar Rapids, IA

Good question. The right kind of term life insurance policy would not only give you the peace of mind knowing your family or dependents are financially secured, it could also stand to save you hundreds of dollars a year. Here are some effective tips to help you out:

Avoid Group Term Life Coverage

You’re rates could probably do better if you go with an individual life insurance policy as opposed to group life coverage, which tends to be at your disadvantage, since most high-risk member makes the rates more expensive everyone else.

Avoid No-Exam Term Life Policies

If you’re relatively young and in good health, there is no reason to avoid the physical exam. No-Exam life coverage is much more expensive because the insurers are taking a bigger risk for not knowing you’re likelihood to die within the coverage period. So unless you have a terminal illness which makes you uninsurable, why overpay?

Kick Away That Cigarette

Did you know that smokers pay three to four times more on life insurance compared to non-smokers? Even if you only finish a pack a week or a pack a month, usage of cigarettes and other nicotine-based products would automatically give you a those high smokers’ rate with most insurers. It takes tow or three years of zero-smoking to get your rates to a non-smoker.

Shop Around For The Lowest Quotes

Getting to compare the cheapest term life insurance quotes, coming from a wider range of insurers in the market, is the best way to maximize your chance of getting the most affordable term life insurance coverage around. In fact, this website is a great place to start your search, with the free insurance quote search tool found here.

Rates Are Cheapest While You’re Young And Healthy

Buy while you are still in relative good health. Buying while you are young gives you access to the cheapest life insurance rates, especially now that premiums have gone down significantly.

I work in the construction business here in Tennessee and there are times that I find myself getting exposed to risk of getting injured or worse.. should I start considering Life Insurance even if I only plan to stay on this job for around five to seven years?

May

Clarksville, TN

This is what you should be asking yourself : “What will happen to my loved one’s or those people who rely on me for financial support, in case I suddenly pass away?”, (regardless of the manner or cause of your untimely demise) if you see yourself gazing into space for an answer, then it may be time that you seriously consider getting a life insurance coverage. It is good to realize the risks and hazards you face in your job and how it can seriously affect your future, as well as whoever you are responsible for there in Tennessee. The next step now is to determine the right kind of life insurance coverage for your situation.

Since you don’t see yourself staying in that kind of job until you retire, you may appreciate a short-term life insurance coverage that is easy on the budget. Term Life Insurance is a kind of coverage that only lasts for a specific period of time. Rates are much more affordable compared to Whole Life or Permanent Life Insurance Plans. You are also under no obligation to keep the policy after the term expires however, you may be given the option to renew the policy by the insurance company.

There are many ways to buy cheap term life insurance coverage. The easiest is to run a life insurance quote check on this website (or any other life insurance portals) and compare rate quotes from across many different providers.

Is it true that I should go with a term life insurance policy here in Tennessee, since it is much better?

Parker

Clarksville, TN

The life insurance industry is a big industry. There are so much life insurance policies (and even more life insurance providers) out there offering different products that no one can claim that only a certain kind of policy would be right for everyone. A good rule of thumb would be to base your purchase on what your financial goals and requirements are in the long-run.

Term life insurance would be best for someone who are looking to get a life insurance policy that would have a big amount of coverage for very affordable regular premiums over a set period of time only. Lets say that you are the head of the family and provide most of the household’s income, or you just got a twenty-year mortgage on a house there in Tennessee, or maybe your still paying long term debts or student loans, if you want to make sure your family or loved-ones get financial support in the event you suddenly pass away then term life insurance would be a great option.

If you are young and relatively healthy or if you’re career or job also involves a certain level of exposure to hazardous conditions or situations, or you participate in dangerous activities, you may also choose to get term life insurance. This kind of policy has very affordable premiums and can be set to last ten, twenty even thirty years depending on your preference.

When do life insurance companies distribute dividends to policy holders?

Sean

Buffalo, NY

If you have a participating whole life insurance policy, your policy earns dividends. Dividends are not the same as those stockholders. Dividends are considered as a return of premiums and are not guaranteed. These are distributed by life insurance company since they do not have stockholders. Excess in earnings are distributed to participating policy owners.

There are different factors that determine whether the life insurance companies will distribute dividends. One of these is when the death claims is less than what is anticipated. When the operating costs are lower than projected, savings is generated. A higher actual investment earnings than projected can also results in distribution of dividends. Higher investment earnings occur when the earnings is higher than the amount needed for a guaranteed death benefit reserves and other contractual agreements.

There are many benefits of dividends. You can use this to reduce your premiums or to buy paid up additions where you purchase an additional life insurance policy that is the same type as your base life insurance policy. You can also allow the dividends to accumulate interest based on the interest rate that the life insurance company is paying on that period. You can also receive the dividends in cash form.

I’m very interested to know how I can get low term life insurance rates here in New Hampshire, any tips?

Bruce

Manchester, NH

One of the best tips that you can get in looking for the most affordable life insurance rates there in New Hampshire would be to first understand your needs, goals or the reasons behind your interest in getting a life insurance policy. There are many types of life insurance policies available and literally hundreds of life insurance companies to choose from. So here are a few things to keep in mind while looking for the best and most affordable life insurance coverage:

1. If you are young and relatively healthy and you have some financial obligations such as paying for mortgage or loans, or if you’re income forms a significant portion, if not the entirety, of the household income, or if you participate in hazardous activities or dangerous places due to work or hobbies, then you will benefit more on a term life insurance policy. The premiums are comparably cheaper and you will only need to maintain the policy for a set period of time (ten, twenty, thirty years or so).

2. If you are already into retirement age and is looking to make your money, grow or have a cash value feature towards your life insurance policy, as well as plan ahead on funeral expenses without having to renew your policy and would also want to have a stable monthly premium, then Whole Life or Permanent life insurance is the way to go.