AFFORDABLE TERM LIFE INSURANCE QUOTES

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Understanding Affordable Term Life Insurance


There are many commercials that pop up on television and radio promoting the value of getting an affordable term life insurance quotes. Now, most people have a clear understanding of what a term life insurance quote entails. However, they may be unaware what the concept of term life insurance centers on. For those that may have a number of questions regarding this form of coverage, the following is a brief overview of what it entails.


As with other forms of life insurance, term life insurance centers on offering a “death benefit.” That is, when the insured dies the beneficiaries will be paid a settlement amount based on the amount of coverage that the insured purchased. Again, this is standard with all life insurance policies. However, term life insurance is different in one respect. Specifically, term life insurance only provides coverage for a certain designated period of time. This timeframe is, of course, the term mentioned in the title of the coverage.


In short, the coverage is purchased for a specified term. When the term expires, the insured has the option of purchasing a new policy. In some instances, it may be the exact same policy at the same price. In other instances, it could be a new policy at an increased price or different terms. And, of course, the insured could also downgrade the policy for a lower premium. Really, this is the major benefit of purchasing a term life insurance policy. A person can save a lot of money on the purchase of a policy since the policies are being purchased in fixed terms.


This makes term life insurance perfect for those that may be on a proverbial budget. Anyone looking to make sure their family is properly covered in the advent of an emergency can take out a short term policy at a reasonable cost. That alone is a huge endorsement for term life insurance.

Fatties Not Fit For Life Insurance

A worrying fact is that a quarter of children are classed as overweight before they are old enough to start school. That figure is one in three by the time they enter secondary school at the age of 11.

Obesity can be related to a range of health problems including diabetes, heart and liver disease and even cancer. In less than a decade since 1999 the number of doctors' prescriptions for obesity drugs rose from 127,000 to more than a million.

And now the insurance companies are going to make the fatties pay.

The Body Mass Index (BMI) is the tool used to calculate whether a person is of 'normal' proportions, or 'overweight', or 'obese', which is anyone with a BMI of over 30. This is the figure at which many insurance companies start charging up to 50 per cent higher premiums. In the past a BMI nearer 40 was used, but as it became clear how serious Britain's obesity problem was, the figure was lowered to 30. However, they might decide to drop lower still, heading closer to the 25 mark where the 'overweight' category starts.

If you are obese and also have other high-risk factors such as being a smoker or suffering from certain medical conditions, the increase in the cost of your premiums could soar to a staggering 400 per cent!

An example for 150,000 pounds of life cover for a 55-year old man in good health, who is a non-smoker of normal weight, is about 1,000 pounds a year. Let him become obese and his 25-year policy could cost him 500 pounds more.

Not all insurance companies use the same BMI rate. The second largest insurer, Norwich Union, uses 35 as the figure at which to raise the premium costs, and the third largest, Friends Provident, goes from 33.

Legal & General, Britain's leading insurer, uses a BMI of 30, and said that 13 per cent of new customers would have to pay the higher premiums.

L&G's director of underwriting and claims, Russ Whitworth said, "Most people understand that poor diet and lack of exercise can lead to health problems but they might not realise that being significantly overweight would also make their life insurance more expensive.

"Although it is not an exact science, we find that BMI is the best indicator of the risk of being overweight, so it pays to stay in shape."

The Association of British Insurers backs its members' decision to charge higher premiums for the obese, claiming that it is no different from charging more for a smoker or somebody with a previous medical condition

Problems could arise for super-fit sportsmen who would have to convince their insurers that their high BMI score is due to building up solid muscle rather than being obese.
It's no point being economical with the truth when an application form asks for your height and weight. In the event of a claim, the company won't pay out if it catches you out in a lie.
The Financial Ombudsman Service says it constantly throws out cases where a claim has been rejected for this reason.

Recently a man of 37 claimed on his application to be six foot tall and to weigh 16 stone. When he died of a blood clot five months later it turned out he was only 5 foot nine inches tall and five stone heavier. Needless to say there was no pay out. His premiums would have increased by 275 per cent if his true details had been known, but his claim would have been valid.

The Financial Ombudsman ruled that there was such a difference between what he put on the form and what he actually measured that it couldn't have been a mistake.

Matt Morris, a policy adviser at specialist financial advisers Life Search, explained, " In an ideal world, insurers want the healthier clients. There is an element of cherry picking. They don't want the burden of the heavier client."

The Prudential is doing something to help. It now offers free gym membership, and if you use it at least twice a week you get a 2.25 per cent discount as well.

About the Author:
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Author: Sheila Challiner
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