Party On! The finer points of term life insurance policies

October 10, 2008 6:24 AM

Life-Insurance-Filter (again): There have been some good threads in the past on understanding/buying life insurance, but I wanted to get a bit more specific this time around.

To supplement my current coverage, I've decided to buy a term policy (possibly renewable), the duration and amount of which will fit my situation. What I wanted to get some insight on are the finer points of these policies. That is, if there are specific "fine print" items to look for (or conversely, to look out for), I'd like to know what those are.

Of course, it's not just the fine print I'm interested in - I'll be evaluating the overall value of the package, based on coverage, price, rating/health of the company (!), etc. Just curious about any additional differentiators I should consider that might influence my overall decision. Thanks!

posted by brandman to work & money (2 comments total)

At the risk of incurring the wrath of those who quibble, there's really not much to buying term life insurance. Make sure you're comparing rates on the same term. Different insurers require more onerous proof of good health at different levels of coverage, so that's one thing to look into. Generally if you're getting a small amount of term coverage you won't have to do much more than a questionnaire and paramed exam. If you're applying for a lot, you'll have to get blood drawn and an EKG or whatever the company demands.
posted by MarkAnd at 6:41 AM on October 10, 2008

Term policies, as you may know, are the simple type. It's pretty much just insurance - there is no "cash value", no saving plan attached, none of the garbage you get with a "whole life", "cash value", or "universal" plan. One exception is a "return of premium" term policy - which is a non-term plan disguised as such. There shouldn't be a lot of fine print, just a term, rate, exclusions, etc. - there shouldn't be a lot of complicated extras tacked on. Of course rate, coverage, etc are going to be a factor in your choice, but also try to go with an agent you feel you can trust - perhaps a recommendation from a friend or family member. Consider whether they are trying to sell you insurance or trying to set you up with the right policy for you.
posted by attercoppe at 9:42 AM on October 10, 2008