Both policies should have a fixed, and guaranteed premium during the term.
Again, this is something that can differ Across individual policies, but
in general, the amount that you pay, every month, or every 6 months, or every year,
in terms of premium costs, should remain the same throughout the term on your term
policy as well as throughout the remainder of your life in a permanent life policy.
Now obviously if you elect to change the death benefit, or
make other types of changes to your policy, that can affect the premium.
But if you don't change the policy, that premium level should stay constant
over time regardless of whether we're talking about term or permanent life.
Both types of polices at the time of application, at the time you start
coverage are going to typically require some form of medical exam.
Again, your general health, your age,
other personal characteristics that are going to impact the likelihood of you
dying during the term are going to affect the cost of that insurance.
That's information that the insurance company's going to require
to be collected at the time of application.
The other point that I'll make on permanent life and
is classified here in the con category is that permanent life or
they do provide some additional coverage beyond that death benefit.
They often do become much more complex than a standard term policy.
So there is lot more options that you can include.
There's a lot more additional thing that can impact that cash value, there is other
tax benefits, that I mentioned, that can be involved in a permanent life policy.
So with those additional options and
that additional flexibility that also means more complexity.
All right?
So it's much harder to compare one whole life or
one permanent life policy to another.
Makes it a little bit harder to shop around and compare apples to apples so
to speak in terms of different, permanent coverage from different companies.
Again I know that I want to emphasize just once again is that individual policies
do differ.
So even though I've outlined some kind of broad general characteristics associated
with these two different types of policies,
individual policies will all differ and you should understand the specific
rules outlined in any policy that you consider purchasing.
All right so what are some of the factors that impact the premiums for
life insurance.
Regardless of whether we're taking about of term life or permanent life or
one of the permanent life option that you might be able to purchase.
Again, personal characteristics are going to be a big factor.
So things that relate to your age, your gender, your overall health and
fitness as well as whether or not you are a tobacco user.
All of these things are going to be information that's collected and
go in to determining your total premium cost as an individual.
Like I said before, a medical exam will most likely be required.
That may involve providing samples of blood, samples of urine that will be
tested in the lab to assess our overall health.
The amount of the death benefit that you elect as part of the policy,
again, regardless of whether it's term or
permanent life coverage, is going to affect the policy.
A larger death benefit is going to be associated with a higher premium.
The type of coverage that you purchase.
Again, term life is going to be less expensive than whole life for
the same death benefit.
And then finally the term of the policy.
Obviously whole life has kind of an open ended term.
It covers the remainder of your life.
Term policies you have some options.
A 10 year policy or a 10 year term is going to be less expensive
than a 20 year term or a 30 year term.
Simply because the likelihood of the insurance needed to be used during those
time periods is going to increase as the length of those time periods increases.
Alright, so just some factors that are going to impact
the cost of life insurance.
So to summarize, again, life insurance is a very basic concept.
It's designed to provide some financial security
to your beneficiaries in the event of your death.