As far as average costs of the different types of life insurance, Universal life would be the most expensive. Next would be R.O.P. (Return of Premium) then Whole life, and finally, the least expensive would be standard term life.
This does not mean that the cheapest is the best for your family situation. As a matter of fact, many people will mix it up with some of two or three different types.
Here are a few tips to keep in mind when shopping around for life insurance quotes.
#1. Purchase life insurance when you are young.
If you have children, consider starting a policy for them. This will keep their premium payments low for the rest of their lives. Premium payments can be ten times, (and even more), lower when starting a life insurance policy while you are young and in good health.
#2. Be aware of "Age Nearest"
You would think that an insurance company would raise their rate as you get older, on your birthday. But, the fact is that a lot of insurance companies will raise their rates on your policy six months before your birthday. This is known as "Age Nearest." Companies that use this "Age Nearest" can end up costing you a lot of money over the length of your policy. Be sure to ask these companies when and how they raise their rates.
#3. Purchase a life insurance policy that fits your needs.
Everyone's life insurance needs are different. If you are nearing retirement, a ten year life policy may be all you need. If you are in your 30's or 40's, you may want to consider a smaller whole life policy along with a 20 year term life. If you are a smoker and plan on quitting in the near future, you may consider a short term life policy.
Then, after you quit smoking, purchase a new policy that would be cheaper now that you're a non-smoker. If you own a home with a 30 year mortgage, you will want to make sure your home is protected with a 30 year term life policy. If you get enough online quotes, you will see a pattern start to form. This will give you a good indication of how much insurance you need.
#4. Look for fluctuating rates as the amount of the policy increases.
Some companies will give price breaks for upping the amount of coverage. You may be able to get a $300,000 policy cheaper from company X than you could get a $275,000 policy from company Y. Point is, check above and below the amount of coverage you are looking for. You may be able to get additional coverage at a lower coverage cost.
#5. Purchase the amount of life insurance that is right for you.
A lot of insurance companies will try and sell you more coverage than you really need. They do this for the simple reason they make more money off you. (Their percentage of a policy sold). the only reason for buying more life insurance than you need would be if you have a large estate to pass along to your beneficiaries to save the assets from being taxed.
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