How to find the best term life insurance policy for your own particular needs...

Term insurance is, without doubt, the most basic and traditional type of life insurance. Although other kinds of policies have been created over the years, a term policy remains the foundation for most folks who want to use life insurance to protect the financial interests of their family.

Learn Before You Buy
This site looks at selecting the best term life insurance from the buyer's perspective. I'm not an insurance agent, but an individual who has bought several life insurance policies over the years and who has, I believe, come to understand the process better. I've learned that the most important part of buying insurance is to do your homework to figure out exactly how long a term you need insurance coverage for, and how much you can really afford to purchase based on your financial and family picture. It doesn't sound complicated, and in truth it is far simpler than buying other types of "whole life" or "universal" policies. But when you actually start honing in on exactly what kind of term life insurance policy you will buy, you realize there are a couple of tricky questions you need to make decisions on.

I recommend thinking through these issues through before you start gathering lots of price quotes. Getting premium quotes are an important part of the process, but you'll often find that the numbers change considerably from the time you get a first quote to the day you sign you policy, based on your health tests and other decisions you may make on your own.

Having a basic long-term approach that fits your own goals before you buy term life insurance for the first time can you save considerable money, and help you avoid being left without coverage later on. It often possible to make changes to your coverage are buy new policies as you get older, but making changes almost always carries a cost. You can minimize your chances of having problems later on, and find the most affordable insurance policy for your needs, if you ask the right questions up front.

Buying From An Agent Versus Buying Online
I'm not out to slam insurance agents on this website. You can do well buying from an agent or by purchasing term life insurance online - if you act as an educated buyer. My one complaint with insurance agents is that they sometimes fail to ask about your overall financial picture - a tremendously important thing in determining how much insurance you should buy. Whether or not you have children, how old they are and, perhaps most importantly, what kinds of financial assets and insurance you may already have, all need to be considered when you choose the best level of term life insurance to buy.

Unfortunately, people buying insurance online without an agent's help often make the same mistake of not looking at the larger picture. They think that by focusing only on price they'll wind up with the most affordable term life insurance policy. But they often end up rushing into policies that may be too small or too large for their real needs.

Here are some key steps I recommend you take toward deciding if you need term life insurance, how much you should purchase and how long a term you should select for your policy:

Tough Decision: How Long a Term to Buy Insurance For?
When you're 35 years old and looking at a 25 year term policy, being sixty years old seems like a long way off. But if you get into your fifties in good health, you suddenly realize that you and your spouse may be around a good while longer, and that not having insurance into your 70's looks like a problem. After all, the average life expectancy in the U.S. is 78 according to the World Bank. Twenty years from now it will probably be even higher.

The problem is that buying term insurance later on, after you've come to this realization, will be a lot more expensive. How long a term policy you can buy always depends on what you can afford at your current stage of life. But it's important to be aware that insurance is cheaper to buy when you're still young and in good health. Buying coverage of this type gradually gets more expensive as you get older, but the cost of starting a new policy really takes off as you get into your sixties. (More on how long a term should you buy, depending on your current age.)

How Much Coverage to Buy?
Car insurance, home insurance, disability insurance...if you have an income, a family and a house or other assets, you can find yourself buying what seems like a crazy amount of insurance. Unfortunately, when you try to consult an insurance agent how much coverage you need, the answer always tends to be: "more."

As you try to protect your family financially in the event that you die, it can be comforting to look at an insurance policy with a big benefit number. But buying as much term life insurance as you possibly can it shouldn't necessarily be your goal. Paying a big annual premium will take money away from other possible uses. It's advisable to look clearly at how much money you want to dedicate toward insurance versus other places you can invest your money.

If you have very some cash reserves or real estate holdings, or if you and your spouse have good incomes and jobs that provide life insurance as part of their benefits packages, you'll want to consider those factors in calculated how much term life insurance you need.

On a term insurance policy of any real size, you're likely to be spending a thousand dollars or more per year. That adds up to a large amount of money over time. Term insurance is great because it just about always gives you the greatest amount of coverage at the lowest cost. But to state the obvious: if you pay $1,500. in annual premiums over 30 years, that's $45,000. you've tied up in something that doesn't accrue a cash value, and that you've taken away from other possible uses.

Getting Multiple Price Quotes:
If you're working with an insurance agent, be aware that most of them are affiliated with a particular insurance company. While that may be a great company, it doesn't mean that it will be the one that gives you the best term life insurance policy for you at the best price. Most agents will gladly get you quotes from more than one company -- if you make a point of asking them to. Don't be satisfied to get a quote only from the company whose logo is on your agent's business card. If you're shopping online, you'll generally find it quite easy to get quotes from multiple insurors.

Knowing All The Terms of Your Policy
As you hone in on buying a policy from a particular company, it's time to look into some important details. Whether or not your term life insurance policy is convertible and/or renewable is a critical, but often overlooked point. What are the terms for renewal or conversion? Another important factor is the financial health of the company you're buying insurance from. A well-known name doesn't guarantee anything. For my own part, I wound up buying term insurance from a company called Aviva. I'd never heard of them, but I found out that while the company has only used the name Aviva since 2000, it has existed in various forms since the late 1600s.