Term is almost always more affordable than whole life insurance or universal life insurance in the short run. Compare term to the monthly rent of an apartment. Usually rent is cheaper than monthly mortgage payments on a house, but the rent will go up every year, whereas with most mortgages, the homeowner's payments will stay the same until the house is paid for (obviously adjustable rate mortgages don't fit this comparison).
If one's short term needs require lower payments, opt for term life insurance. But just as homeownership is preferable than being a long-term renter, switching to whole life is a more prudent decision in the long term.
There are many ways to calculate your life insurance needs. Every day it seems new websites pop up that have calculators to help you determine what your family's future will be. Most of these methods assume a certain rate of inflation and also rates of return on the growth of your policy. Using these assumptions, they calculate what amount of money would be needed to replace your income.
If the buyer is a smoker or in ill health, he or she should expect to pay more for a life insurance policy. But fortunately, there are life insurance policies for smokers, so they can get coverage, albeit at a higher rate.
Another concern when choosing a policy is how financially solid the life insurance company is. Fortunately each state regulates the insurance industry and requires each company to hold money in reserves to meet its obligations and policy claims. Furthermore, outside rating companies give comparisons to the fiscal soundness of each company.
The internet has made buying a policy easier with instant life insurance rate quotes, online life insurance quotes comparisons and the ability to buy life insurance without a health exam. By locating the right websites, a consumer can learn whether a whole life policy or a term policy best suits his or her needs. This person can also get a calculation of how much life insurance he or she needs and an instant online comparison of quotes.
