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.

The Facts about Life Settlements

Until very recently, there were only a few options available to people who no longer needed their life insurance policies. They could either surrender their policy to the insurance company that had issued it for its cash surrender value or they could just stop paying the premiums and allow the policy to lapse. With regards to term insurance or any other policy without a cash surrender value, the only choice available was to let the policy lapse. However, there is now a secondary insurance market in which policy holders may be able to sell their policies for more than their cash surrender value or sell a term policy without any cash surrender value. These transactions are called life settlements.

There is a very simple concept behind life settlements. Basically, a policy holder will sell his or her policy, normally through a broker, for a fixed value that is usually three to four times the amount they would have received by simply surrendering their policy to the issuing life insurance company. The buyer in these cases is usually an institutional investor and will take over the payment of the premiums as well as collect the death benefit once the policy holder passes away. The purchase price of a life settlement is determined by considering the policy holder's average life expectancy along with the respective cost of premiums to keep the policy operational within its term. Thus, a life settlement will allow you turn a relatively untouchable asset into something immediately useful and liquid.

There are two types of life insurance settlement transactions -

  1. Life or Senior Settlements allow policy owners above 65 to create immediate liquidity from unaffordable or obsolete life insurance policies.
  2. Viatical Settlements help someone facing a terminal illness to make use of the present day value of their life insurance policy. The cash can then be used to offset the prohibitive costs of medical care.

You could be considered an eligible candidate for a life settlement transaction if:

  • You are 65 years or older
  • The face amount of your policy is worth $50,000
  • The policy has been active for a minimum of two years
  • The policy has a low cash surrender value
  • Premiums are less than 8% per annum

Life settlements can be considered for the following types of insurance:

  • Universal, Whole or Variable Life
  • Term (if convertible)
  • Survivorship (any type)
  • Adjustable Life
  • Joint First to Die

There can be many reasons opting for a life settlement. In times of financial crisis or when you simply can't afford your premiums, the liquid cash might be necessary. For others, funds may be needed on an urgent basis. In some cases, coverage may no longer be required, for example if the primary beneficiary has divorced the policy holder or died or the business has been dissolved. Rather than simply allowing a policy to expire or surrendering it to the issuing company, life settlement firms are able to help consumers to maximize the value of a dormant asset.

Life settlements are also becoming more regulated and monitored and many policy holders are still unfamiliar with the procedure and benefits, those established in the industry are now emphasizing the need for life settlement education for financial professionals so that the benefits can be accurately presented to all those who might be interested.

About the Author:

About AccuQuote
:AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

Author: Denise
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