by Jorge Blackwood

Created on: March 14, 2010   Last Updated: March 15, 2010

There are many different factors in determining the lowest term life premiums.

If you were to investigate the purchase of a basic term life policy you would need to determine two foremost factors that must always be considered; the first is the amount of coverage, and second is length of term coverage. With these two factors you can obtain a basic term life product to fit your needs.

First the amount of coverage is an important factor because the premium for a $10,000 policy is going to be completely different then the premium for a $100,000 policy. Usually the larger the amount of coverage the higher the premium.  Of, course there are exceptions to this general rule.   Some exceptions are that a policy that is a graded or rated will have a higher premium than a policy that has preferred or standard rating of the insured. 

Which means that a person with a $100,000 preferred rating policy will pay considerably less than a per with a $10,000 policy that is graded due to the insured being a higher risk due to illnesses or operations incurred or the amount of medications that have been prescribed.

The Length of term is another important factor because depending on the company a 10 year policy may be less expensive than a 30 year policy for the same amount of coverage. However a 15 year policy may be more expensive for a young person than a 30 year policy. Insurance companies take into consideration the age of the insured and their mortality rate when determining the premium charged to the insured. Some companies will not offer 10 year policies to young policy holders because they believe it is not cost effective. 

The mortality rate is basically the chance of death of an individual based on multiple factors such as age, health, income, etc. These rates are determined by actuaries. The used to determine these rates to age 100 but now they are rated to age 121 due to the longevity of people now. With the advance of health care and food processing people are living longer therefore the longevity rate is longer for insured’s in this country than it used to be 25 years ago. Thus this assists in determining the lowest premium for a term life policy.

There are other factors that must be considered before determining the lowest term life insurance premiums in the United States. You must determine whether the coverage is an accidental death policy or a hybrid policy or an all cause policy.

What this means is that if it is an accidental death

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