Between the different life insurance types you now understand the huge drawbacks when it comes to purchasing whole life insurance / permanent life insurance. Get a term insurance policy to protect you and your family instead.
Learn the difference between life insurance types: Term vs whole life insurance.
Tip#1 on finding Inexpensive Term Life Insurance
Knowing the right amount of coverage / death benefit that you actually need is important before you actually go to an online life insurance comparison site to get quotes. You want to have more coverage than you actually need instead of being underinsured. With Term prices being the much more inexpensive of the life ins types you won’t need to worry as much about being over protected as you would on a whole life policy (permanent life). When comparing the monthly premium costs for term vs whole life with same coverage amount cheap term insurance beats out costly whole life / variable life / universal life 100% of the time.
Expenses to calculate before you buy life insurance:
Daily Living Expenses (Food/Clothing) Educational Expenses for the kids (College) Childcare Expenses Mortgage Payments / Housing Payments
Make sure you calculate those expenses and take into account future expenses that may arise. This will give you a good idea of the coverage that you need each month over 30 years or how every many years you need coverage for.
Tip#2 on finding Inexpensive Term Insurance
Once you have your life insurance rate quote(s) online wind it down to 3 companies and the quotes that you feel comfortable with and then take a look at the company financial rating:
Highest Rating / Financial Strength Rating of Company:
Standard and Poor’s: A++ (Secure/Superior) A.M. Best: A A A (Extremely Strong) Moody’s: A a a (Exceptional) Fitch: A A A (Secure/Highest)
Again, if you are looking for a great life insurance policy make sure you check the insurance credit or financial rating of the company. That’s a major component of what makes a solid policy. If you purchase any life product from a company that has a terrible financial rating then your policy is worthless. Why? If you die the company may not pay out your death benefit on your policy. You can definitely find very good quality, cheap life insurance from a company with an extremely high or the highest financial rating.
Tip#3 on finding Inexpensive Term Insurance
Set not only the correct amount of term insurance coverage but the correct duration for your coverage.
Knowing that you do not need permanent insurance for the rest of your life you are only covering the years when your children are growing up. Why is this the case? The reasoning behind this is that your children are dependent on your income so you need to insure your income until they become independent which is normally after they find a job after graduating from college. When they can create their own income you will no longer have dependents who require your income and therefore no longer have a need for insurance coverage.
Term is normally quoted in the durations listed below: 30 year term, 25 year term, 20 year term, 15 year term, etc. (increments of 5 years). It is very inexpensive and is only needed for a finite amount of time. If you understand that aninsurance gets much more expensive as you get older you only want to purchase it when you need it. Buying insurance is not a way to become rich. There are other ways of achieving financial freedom for you and your family outside of this type of insurance. You won’t have to keep one eye open at night either!