The simplest form of life insurance is term life insurance.
These policies are taken for specific period like 1-30 years. If a person dies within that period, the beneficiary will be given the policy’s full face value. If the person outlives the policy, his beneficiaries are not entitled for any pay out.
To protect the interest of the policyholder, insurance companies have now introduced a clause that allows a person to convert it to any other policy at the time of expiry. A cheap life insurance policy is the 10 year level term.
This type of premium is simple enough to understand, has a level premium for the entire duration and guarantees the payout of the death benefit. This is why this policy is ideal for most people who are looking to purchase an affordable life insurance policy.
Another advantage of this type of policy is that the policy holder may renew it before the policy expires or convert the policy into a permanent one.
The best term life insurance is the 10-year level term policy which requires a small investment for a short period of time. Here are the features of this type of policy:
* Death benefit * Conversion privilege * Riders * Living benefit riders * Child and spouse riders * Minimum and maximum coverage
Once you have decided that the 10 year term insurance policy is the ideal one for you, your next step is to ask a life insurance quote on line from different insurance companies. Comparing online quotes would allow you to study the different policies side by side and let you decide the best policy for you. You can easily get different quotes from different insurance providers for you to compare and study with.
A policy holder may choose to have his/her beneficiaries receive the face amount of his/her policy in a one time lump sum payment or as a monthly income. However, if through monthly income, the policy holder must choose a beneficiary that will live long enough so that the entire amount of the coverage is exhausted.
Hence, either choose a lump sum payout or make sure your beneficiary is paid a fixed sum over a 10 or 20 year period. Another option is to keep the principal intact and payout an interest to the beneficiary over a fixed period.
The third option of having the principal intact and only giving the beneficiary interests earned is ideal for young beneficiaries to prevent them from wasting the inheritance in impractical purposes. After the fixed period is over, the entire principal amount is paid back to the beneficiary. Policy holders must make sure that their policies allow them to convert their term policies to a permanent one.
Riders to a policy can increase its value to the holder and beneficiaries. For example, the waiver of premium rider means that if a holder becomes disabled 6 months after taking a policy, the insurance company will pay premiums for the entire duration.
Another rider is the living death benefit rider which allows the policy holder to withdraw a portion of the coverage amount to be used for medical reasons even if the policy holder is alive.
A third rider is the spouse and child benefit riders which for an additional amount, both the spouse and the child can be covered by the same policy.
The minimum and maximum coverage depends on the medical history and age of a holder. The amount varies depending on the insurance company. The 10 year level term insurance can be taken with or without a medical exam being undergone. If you choose term life insurance no medical then the premium will be higher although the policy can be got instantly. In such a case, the minimum and maximum amounts maybe curtailed.
Applying for an instant term life insurance policy is a simple enough process. First, you can go to a website offering it and indicate your preference of not undergoing a medical exam. Next, you have to answer all the questionaires regarding your personal data and medical history. Purchasing a no medical policy will give you instant policy but you will have to pay higher premiums.
Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on life insurance quotes and cheap life insurance, visit his site today.