Term life insurance that is yearly basis are the cheapest policy in the market. Also it is the simplest form of term life insurance that can be availed by any one. In this annual based polices the benefits are covered only if you die with the year the policy is effective, that is if you die after that year you will not be entitled for any benefits. In fact the possibility for a person dying in such a short time frame is very less and most of the time the insurance escapes fro paying the benefits which is the reason behind these policies being so cheap. If for look deeply these low cost term life insurance are of really no use. You can go for these policies only if you want a temporary coverage.

If you want these low cost term life insurance to cover your long-term needs then you needs to face quite a few problems as discussed below:

• As these low cost term insurance policy are yearly basis ever year you need to renew the policy if you want to have actual benefits. So will renewing you will need to provide them with proof of insurability. By chance if you develop any terminal illness then the insurance company may not renew you policy. This is one major problem and you can overcome this by adding a compulsory renewal clause when you buy the policy. By this you can continue your policy but certainly you will need to pay more.

• Since these are yearly policy and needs to be renewed every year the insurance rates increase with age. Every time you go to renew you policy you will see a increase in the rates and down the line after ten years or so you will realize how much the insurance rates have increased. So the ever increasing policy price is another issue.

Therefore, it is clear that this policy known as the ‘annual renewable term’ is not actually the answer to your long-term insurance need. It is much better to look towards ‘level term life insurance’ policies for such an answer. These policies are also low cost term life insurance, but since the rates are based on sum of each year’s annual renewable term rates, they seem a little higher in the beginning. However, given that the rates remain level through out the term duration, they will never seem unviable.

Buy level term life insurance for as many years as you need the coverage. You can buy it for 5, 10, 15, 20, 25 or 30 years. Note that the longer is the term, the higher will be the policy prices because in such a case, the insured has higher chance of dying within the term. Therefore, buying it for too long is not wise; neither is buying it for too short a term. Finding the right term duration is key to low cost term life insurance.

How do you find the right term duration? First, find out what you intend to cover with your term life. Because term life does not offer anything other than death benefit, its primary use is to provide the coverage of financial responsibilities of the insured. You can buy it to cover your mortgages, consumer debts, children’s higher education, dependent care etc. You can buy small policies to cover individual liabilities or one big coverage that includes all.

Let us take the issue of individual small coverage first. You should know before how long you can square up most of your liabilities except perhaps dependent care. Add few more years to cover any contingency. To decrease the price of the low cost term life insurance even further you can cover your mortgages and loans on decreasing term life insurance. Since the face value of such policies decrease as you keep paying off, the rates are even lower. However, that is another issue.

Most experts would advise you to stay covered until you are sixty-five if dependent’s care is your main issue or if you want to buy one big all-inclusive coverage. By that time, you should be able to pay up your debts and mortgages, your children should be self-sufficient and you should have made enough money to take care of any rainy day.

Before finalizing the exact term duration you must consider things like your children’s age, your retirement age, any long-standing financial obligation you may have into consideration. Also add few more years to cover any contingency. Life insurance policy cannot be standardized to need all needs. You must always keep in mind what is that best suits you and your family. So you must keep all these factors into consideration before buying low cost term life insurance.

For more great writings by David L. on cheap life insurance rate , click to find out.