Searching for Lower Insurance Rates
With the declines over the years of term life insurance, you might want to consider dropping your older policy and shopping for a new lower-cost policy. But first, make sure the newer policy is the same coverage as your current one.
Also, take into account the fact that you were younger when you bought the policy you have now and your health status may have changed. A newer policy will certainly have a new contestable period. The word “contestable” is an insurance terms meaning that for the time period when something in your application, such as your health or your age, could be used to deny a claim. This is generally in effect for a year or so from the beginning of the policy. So when you apply for a new policy, you will then be subject to a new contestable period. For this reason, be sure to start the new policy before you end the old one.
It is more difficult to make comparisons to the cash value of life insurance. Life insurance is regulated by “State Insurance Departments” so it is advised that you contact the Insurance Department in your state to get a “replacement comparison” chart. With help from a representative of the new insurer, this chart can then be filled out.
What are your Needs?
Do you really need it? This is the first question you should ask yourself. The purpose behind life insurance is to have that source of income for you children, spouse or dependents in the unforeseen event of your death. Estate planning is another reason for this insurance. You could give money to a charity when your time comes, or pay your funeral and burial costs and even provide for a buy-out for the interest of a business.
Only you know whether or not your need it and that depends on if anyone is relying on the income you bring in. Anyone with kids or spouse, parent or another individual could probably use life insurance. But if you don’t own a business, are not married or have no kids, then it is likely you do not even need life insurance.
If you think life insurance is for you, then the next step is to decide which policy is right for you. Generally, there are two categories: term and cash value. Term is set for a specific amount of time and if you die with that time frame, the insurer pays your survivors. Cash value, besides paying death benefits, there is also a redeemable value during your lifetimes.