term life insurance

Budget Rates Life Insurance

Guaranteed Life Insurance

Guaranteed life insurance rates are offered by all of the competitive term life insurance companies. This means that if you purchase a 20 year term life insurance policy, the premium that you pay in year 20 will be the same that you pay in year one.

You could actually decide to keep the policy beyond the end of the initial term period, in this case 20 years, but the rate is usually higher than you will want to pay. This is because the company also guarantees renewability: you are guaranteed to be able to renew the policy up to age 95 (even beyond the end of the initial term period). Of course, the company prices this renewal based on the assumption that you are uninsurable for any other policy. Nevertheless, if you need the coverage and can't obtain it any other way, at least you have the option to obtain it.

Here is an example of a policy which was issued to a 44 year old man in perfect health. It was a 30 year term policy, which means that the premium will stay level for the first 30 years. In this case, the premium was $842 per year for a $600,000 policy. After 30 years, at age 74, he could choose to renew the policy even if he were on his death-bed. The guaranteed premium in this case would be $39,674 per year. This seems like an enormous amount of money. But, consider that the payout would be $600,000 if he dies. So, he (or his beneficiaries) could pay this amount for 15 years and still not have paid the $600,000 which would be paid out when he dies.

Keep in mind that some agents may want to sell you a policy with non-guaranteed rates. Don't take it! The very small amount that you might save to give up the rate guarantee will be quickly eaten up once the company starts to raise the rates.

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