Buying Term Life Insurance: Important Dos And Don’ts

A term life insurance policy can be a great option if you're looking to enjoy the peace of mind that comes with having life insurance but don't necessarily want to commit to a lifelong policy. Specifically, a term life insurance policy can last anywhere from one year to several decades. Thinking about shopping around for one? Make sure you keep some basic guidelines in mind to ensure you end up with the right policy to suit your needs.

DO Decide on the Right Term Length

Start by deciding which term length is right for you. Keep in mind that the shorter the term you buy, the less you'll pay. However, many people opt for a longer term because with longer term policies, the increasing costs each year are spread out throughout the life of the policy itself. It's only recommended that you go with a longer term, however, if you plan on keeping the policy for the entire life of the term. 

DON'T Forget to Research Company Performance

Of course you want to make sure that the insurance company you trust to pay out an estate in the event of your passing will actually have the means and reputation to do so. You don't want to make assumptions about this. Take the time to research the insurance companies you're considering, making sure to read reviews from past policy holders and their family members. This should give a better idea as to how reliable the company is and how easy they are to work with.

DO Consider a Convertible Policy

A convertible term life insurance policy is one that will allow you to convert to a cash value insurance policy at your discretion down the road. This is almost always recommended if you're shopping for life insurance, as convertible policies typically don't cost much more than non-convertible policies. After all, it's nice to have the option to convert, as you never know what life will bring you.

DON'T Buy a Policy That Requires Annual Exams

Finally, make sure that the term life insurance policy you end up with is renewable. This means that you won't have to have an annual health exam done in order to maintain it, and you may not even be required to have a health exam done when your policy term is up and you want to renew. This will save you a lot of time and hassle down the road.