Whole life insurance is an insurance policy that you keep for your whole life. Whatever the premium is at the time you take out the policy – based in part on the amount of coverage and your age – that premium remains constant for life.
With a term policy your coverage lasts for a certain number of years – the term of the policy – and then the policy expires and your coverage ends.
Initially term life insurance may seem like the better deal because you’ll initially pay a lower monthly premium for basically the same coverage as you’d get in a whole life policy. But at some point your term insurance will expire and then you’ll need to buy another policy with a new – and higher – age-based premium. The purchaser of a whole life policy, however, continues paying the same level premium for life.
While several things affect the cost of your insurance, there are two primary determining factors for the monthly cost of your life insurance: the amount of your coverage and your age at the time you take out the policy.
Obviously the more insurance you take out, the higher your premium will be. However, the cost of a $1,000,000 policy is seldom twice the cost of a $500,000. The higher your policy amount the better “deal” you will be offered.
The younger you are when you take out your policy, the lower your monthly premium will be – so it is better to take out a policy this year than wait for another birthday to pass.
Your health is also a concern. If you have a history of heart problems, diabetes, cancer or any other life-threatening health concerns you can count on paying a higher premium for your life insurance. If you smoke you can also figure on paying a higher premium – but if you can kick the habit not only will you save money on cigarettes, you’ll also be able to get a lower life insurance premium. Likewise, losing weight can also lower your monthly premium payment.
Make sure your credit rating is in good order. Many people are not aware of it, but your credit rating can have an affect on the amount of your life insurance premium. Pay off your credit cards and keep your credit rating high.
If you drive a sports car or a high-performance vehicle or if you have a job which can be considered dangerous you life insurance premiums will reflect the added risk the insurance company is being asked to take.
Lastly, shop around. Policies with nearly identical coverages can vary in price by hundreds of dollars each year depending on which company you choose. However, don’t choose the lowest-priced company if it is not a company that you feel comfortable counting on to be there when the time comes to collect on your policy.
Remember, when you’re searching for an affordable life insurance company in Nevada, not only is the company taking a risk by insuring you – you are also taking a long-term risk by counting on the company to still be in business when it comes time for your loved ones to collect the benefits you worked so hard to leave them.