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Term life insurance is one of the expenses that you cannot cut, no matter what your financial situation looks like.
If you are shopping for coverage, or you are debating whether or not to replace your existing plan, you must compare term life insurance rates so that you know that you are paying competitive premiums and not compromising coverage or quality.
All too often, people who have coverage through work or have no partner and dependents to support will choose to put off buying insurance or cancel their individual term plans rather than price shopping.
Some consumers who want to reduce monthly expenditures will even cancel their insurance when they have obvious financial obligations and a need for financial planning.
Without the appropriate amount of coverage, you pass the burden of paying for debt and living expenses on to your loved ones long after you are gone.
You may not be present to experience the struggle, but the last thing you want to happen is for your family’s standard of life to diminish.
Instead of putting your family at risk day and day out, it is your duty to find the most competitive rates. Read on, and learn why it is important to research products, understand how group life differs from individual life, and comparison shop before you elect not to carry insurance.
Be sure to use the FREE comparison tool at the top of this page to begin your search!
Here is your consumer guide to term life insurance and what to consider when you compare term life insurance rates:
What are the differences between group life and individual life?
Many people who are employed by an organization that offers benefits assume that group life is a good replacement for individual term life plans, but that is not the case.
Group insurance and individual insurance have their own advantages and disadvantages. They also have their own terms and conditions. Here are the qualities of each:
Group life insurance is a an employed-sponsored plan that is chosen by the employer and offered to full-time and some part-time employees who qualify for benefits.
In addition to choosing the type of plan and the provider of the insurance, the employer will own the coverage.
Group life insurers cannot exclude someone because of medical conditions or other risk factors.
They can, however, set limits on how much coverage you can purchase based on your income because they will pay for a part of the premium.
The cost sharing makes group life more affordable than other options.
Individual life insurance is a policy that you choose and you own outside of work. You get to choose the carrier, the type of plan, the death benefit and the riders to add that will provide the right type of protection for your family. You own your plan and only you can decide when you no longer want it.
Because it is not an employer-sponsored plan, you will not qualify for group discounts or cost sharing with the employer. You will carry the burden of paying for the cost of insurance by yourself, but you can select the insurer that will offer you the best rates instead of being obligated to work with a specific insure.
Individual insurance providers also typically require you to qualify for coverage. They are allowed to deny people because of their health and history, and because of this group insurance can become a good alternative.
Why Group Insurance is Not a Replacement For Individual Term Insurance?
Having group insurance is better than having no insurance at all, but your group benefits do not eliminate your need for an individual plan.
There are several reasons why you should compare term life insurance rates and buy individual plans when you only have a group plan in effect. Here are the major drawbacks of group term life that many are not aware of:
You Lose Coverage When You Retire or Leave the Company
You may plan on working for your employer until you retire but that is not guaranteed. Group life is a benefit that is only available to you when you actively work for the organization, even if you leave on good terms.
Choosing to retire, getting fired, getting laid off or choosing to take an opportunity elsewhere means that you will no longer have life insurance unless you carry individual insurance elsewhere.
If you do not and you are approaching retirement, qualifying for coverage may be difficult.
Your Employer Can Eliminate the Benefit at Any Time
No one wants to be diagnosed with a life-threatening illness, but if you are you may get peace of mind in knowing that you have group life through your job.
Unfortunately, you do not have a say in whether or not you will own the policy from one year to the next because the organization owns the plan. If costs get too high, they can cut the benefit and you are left uninsured with a pre-existing condition.
Payouts Can Take Years
Claiming life insurance benefits should be easy, but some group insurers take a long time to process claims.
They must verify the cause of death, review policy terms, and see if exclusions apply.
Your beneficiaries may have to find a way to survive financially and replace your income until they get a payout unless you have individual insurance.
The Benefit Limit Is Restrictive
Group insurance must be available to all members of the group, but because there is a great deal of risk present you will have maximum benefits that you can request.
Many employers only allow 2 to 3 times your salary.
You cannot buy more than you are limited to, and because of this you need individual insurance.
Buy as much group insurance as you can if you are high-risk and your age and health status does not meet underwriting guidelines.
Why You Need to Make Comparing Term Life Insurance Rates a Priority
If you receive group life benefits, you have no choice but to select a specific plan. This does not give you must freedom when it comes to controlling the cost of coverage, but most employees do not complain because they only pay part of the premium.
If you are buying an individual term plan, you are paying for all of the expenditures out of your own pocket with gross income and not your net income.
With individual life insurance comes several choices. Because you have a choice, you will need to set aside time to do research so that you can focus on choosing a financially secure company that has money to cover the life insurance benefits that are claimed each year.
Here are some of the considerations to make before you begin to compare rates for an individual plan:
A company in the finance sector is only relevant if they are financially secure. If you do business with an insurer that does not collect the appropriate premiums or make good investments of premium dollars, they are more likely to deny a claim or go out-of-business.
When a life insurer goes insolvent, it can affect your financial planning for the future.
Be sure to check the financial ranking of the insurer that offers what looks like competitive rates before you select a company on the verge of closing its doors.
Customer and Claims Satisfaction
You want to receive excellent service when you need to service your policy, and you want your family to get great service when they are claiming benefits. If you never file a claim within the term, at least you know that you paid for premier service during the life of the policy.
To avoid doing business with a company that delays payouts, makes servicing plans difficult, and misrepresents their policies, be sure to check the company’s complaint index.
You can check this by visiting the National Association of Insurance Commissioners Consumer Information Source.
This source will show you the index, complaint trends and how a company might compare to others based on the number of complaints that have been investigated.
This tool gives you the power to identify companies that are not dedicated to service and customer satisfaction so that you can avoid them.
Policy Options and Features
There is more than one type of term insurance plan. You can choose from level terms, annual terms, accidental death and also guaranteed premium plans.
You need to distinguish between the options and find a company that offers what is best for you.
The best way to keep the costs of individual term insurance down is to compare rates. The most effective way to compare rates is to use an online rate comparison tool that gives you instant rate quotes with many insurers on the same, single platform.
Consider the drawbacks of group life and fill the gap that exists by purchasing your own plan. Choose a death benefit, compare pricing, and apply for additional cover now.
Use the FREE comparison tool below to start searching for coverage today!