Your chances of getting hit by lightning while standing on the steps of the Supreme Court in Washington DC are probably no greater than your chances of becoming president of the United States. However, your chances of suffering a heart attack, or being hit by a car and expiring on the scene are not as improbable as it might seem. Buying life insurance is a sensible response to the risks we all face every day.
When you buy life insurance, you may wonder how the premium is calculated and how often it is calculated. If you buy a whole life or term life insurance policy, will you have to pay a higher premium each year because you are getting older, and closer to the end, each year? The answer is no. If you have either a whole-life or term-life policy in place, the life insurance company does not calculate your premium each year.
A whole-life policy covers you from the time you first purchase the policy until the day you pass away, provided, of course, that you pay your premium. The amount that you pay each month, or each year does not change as you get older. Your premium is calculated at the time you purchase the policy and is based on your life expectancy.
If you choose to buy term-life insurance, your premium is calculated at the beginning of the term and remains the same until the term is up. If you have a clause that allows you to renew the policy for another 10 years after the policy expires, a new rate will be calculated based on your advanced age. Any time you buy a new policy, the insurance company will calculate a premium that corresponds with your life expectancy at the time the policy is issued.
For more information about the different types of life insurance available here in Washington, DC, please give us a call and allow an independent agent to help you out.