The Dangers of Cheap Term Life Insurance

"You get what you pay for." That adage may seem trite, but its applicability to the life insurance industry is indisputable. That is not to say that high-quality term life policies must, by definition, be prohibitively costly. On the contrary, LifeInsuranceRates.com matches thousands of shoppers with quality, inexpensive term life insurance every day.

Problems only arise when consumers choose cheap insurance life term policies solely on the basis of price appeal rather than the caliber of the coverage provided. Blindly choosing a cheap term life insurance policy can expose you to several serious risks, the most serious of which are explained below.

A Disreputable Carrier

In the insurance business, the reputation of the carrier is everything. If the insurer that underwrites your policy exhibits any financial instability, unethical behavior, or poor customer service skills, it does not bode well for your policy. Term life insurance cheap will fail to serve its fundamental purpose-to provide for your survivors' financial needs-if you cannot count on the company that provides the policy in the first place. You want to invest your money in a company you can count on to be able to pay your claim when you pass away, and haphazardly selecting the cheapest term life insurance policy is not the best way to do so.

An Insufficient Death Benefit

The size of your policy's death benefit could mean the difference between your loved ones living a comfortable life after your passing and having to struggle to make ends meet. An insufficient death benefit might mean your children would have to forego their higher-education aspirations or your spouse or partner would have to postpone retirement indefinitely. When you choose cheap term life insurance online without considering the quality and amount of coverage, you run the risk of giving your beneficiaries a short shrift. Again, an inadequate death benefit would defeat the very purpose of term life insurance-to afford your survivors a comfortable lifestyle after your death.

An Unreasonable Term

With very few exceptions, most life insurance shoppers need an inexpensive term life insurance policy with a term of 15-30 years. The cheapest term life insurance policies often come with impractically short terms, such as five or ten years, which fail to meet the needs of the average life-insurance consumer. While your premiums may be lower on short-term policies, if you still need coverage at the end of your policy's term, you will face substantially higher premiums as you age. As a result, coverage may become unaffordable because you failed to choose a policy with a sufficiently long term originally.