Term life insurance cheaper than ever

Life insurance is one of the many important investment choices that can be made in life. Taking out a life insurance policy insures that your loved ones are protected after you pass away. There are many different options for taking out a life insurance plan, and right now is one of the best times to do it, according to an article written by Suze Orman entitled, “Now is a great time to look into life insurance,” featured on the website, Topix.net. Her article discusses how much people can save a bundle of money right now if they cancel their current policy and take out a new one. She also talks about the differences and benefits of term life insurance as compared to permanent life insurance. Of course she advises that one should never cancel their policy before they are approved for a new one.

She states that the reason why people should look into buying life insurance right now is because it is cheaper than ever before. “Protecting your loved ones with a term life insurance policy costs one-third less than it did 10 years ago. That makes life insurance a great deal for anyone who needs to purchase a policy. But what's really interesting is how much folks who already have a policy can save if they ditch their old expensive policy and take out a new one. Of course, that only will make sense if the insured is still in good health. Never cancel an old policy until you have been approved for a new policy, have paid your first premium and the new policy is active,” Orman said.

Orman shows how this will work with the example of a 30-year-old man who had a previous 20-year term life insurance policy and ten years have passed. She says, “Let's say that 10 years ago you were a healthy 30-year-old guy who bought a 20-year level term insurance policy with a $500,000 death benefit. Translation: You bought insurance for 20 years and agreed to pay an annual premium that will not rise during the 20 years. If you die during the 20-year period, your beneficiaries get a $500,000 payout. If you are still alive after 20 years, the policy simply expires with no payout to anyone.”

“That policy taken out 10 years ago by our then-30-year-old has an annual premium of $455, according to the folks at Accuquote.com, an online life insurance firm. But if the same fellow, now 40 (still in good health), wanted to save a bundle, he could take out a new 10-year, $500,000 level term policy (remember, he originally bought a 20-year policy, and 10 years have elapsed, so he may only need insurance for another 10 years) and pay just $295 a year. That's a 35% savings!”

“Or if he decides he wants to extend how long he has insurance, he could add an extra 10 years to his coverage. So instead of taking out a new 10-year policy, he would go for a new 20-year policy. The cost: $470 a year. He just bought an extra 10 years of coverage for only $15 more a year than what he currently pays on the policy he bought in 1996.”

This example is a great way to see the advantages of taking out a life insurance policy right now when the rates are so much cheaper. Even if you already have an existing plan, Orman explains the benefits of canceling and looking into taking out a new policy.

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