Online term life insurance quotes have played a dramatic role in driving down the cost of term life insurance rates. Why is this? Term life rates have decreased substantially due to the increased price transparency of the Internet, the highly competitive nature of the insurance industry, and the convenience of the online quoting process. All of these three factors have helped many Americans to find very affordable term life quotes online.
Price Transparency of the Internet
10-20 years ago shopping for term life insurance could be a gigantic hassle. When you consider that an appointment would need to be scheduled, illustrations would need to be prepared, and a sales presentation endured all simply to see some concrete numbers. (And that is not even taking into consideration the fact that it was next to impossible to compare more than two different companies side by side). Now with the price transparency of the Internet rates have dropped quite a bit as insurance shoppers can now just compare online price quotes in less time that it takes to brush your teeth.
Highly Competitive Nature of the Insurance Industry
The insurance industry is extremely competitive, especially in the area of term life insurance. With the exception of Return of Premium (ROP) term and a few other term insurance variations there is not really a whole lot of difference in one term life insurance policy versus another. Yes, you want to choose an insurance company that is rated an “A” or higher by AM Best for their financial strength and yes, you want a big company that you can trust but once those criteria are satisfied then term life insurance is a very commoditized product. This ability to compare “like to like” and “apples to apples” puts tremendous downward pressure on insurance companies to maintain competitive term life insurance rates.
Convenience of the Online Quoting Process
No appointment is necessary. No traveling is necessary. No sales presentation is necessary. No requirement to request information during standard 9-5 business hours is necessary. All of these positives are reasons why the online life insurance quoting process is fast becoming a preferred avenue for many Americans. You can now request life insurance quotes from multiple insurance companies and view some solid numbers from the comfort of your own home or office 24/7 – all in less time than it takes to brush your teeth!
What is Term Life Insurance?
In it’s simplest definition it is a life insurance policy that is used as coverage for a set number of years or ‘term’. Terms can typically range from 1 year to 30 years.
Term life insurance in contrast to other forms of life insurance, does not build cash value with time. Being that it is a temporary form of insurance limited to a certain term, it will only pay a benefit if the insured person dies during the term. In this case the beneficiaries are paid a fixed benefit. If the insured dies outside the term by even a day the benefit is not paid.
Why choose a Term life Insurance policy?
As it is a temporary insurance not building cash value, it is a more inexpensive form of insurance than others. With lower premiums it can provide a higher benefit return to premium ratio. It is particularly useful as a temporary insurance option to cover your financial responsibilities for any dependents you may have. Some Insurers offer what is sometimes called a conversion option, which essentially allows the insured person to switch to a permanent life insurance policy when their cash flow allows within a certain a certain period of years. This conversion privilege option has the advantage of turning the term life insurance policy into a more desirable permanent policy without the requirement of proving themselves insurable at the conversion time.
Types of Term Life Insurance.
While at the lowest end of the scale a 1-year policy can be sought, but as noted earlier, this will have no benefit should the person die outside the 1-year mark. 1 year is not a commonly sought term for life insurance but is available should the special need arise. There is a variation of the standard term policy that is known as Annual Renewable Term or ART.
This is a safer option for the insured as it can allow for the small one year term to be covered but the policy allows for extended coverage for a set number of years after that. This ART version of term life insurance is a slightly more expensive and as the age of the insured person increases so does the premiums of course.
Choosing an Insurer
The best option when looking for term life insurance quotes online is to compare their features and benefits as there will inevitably be some differences both in price and policy structure. Many big insurers advertise online and have websites that will allow you to request further information and quickly do the comparative research you need to make an informed decision.