Question:
I have been paying in to a Chase Life term insurance policy for $100,000.00 for over 10 years. I have recently received a quote for $250,000.00 term policy for LESS than I am paying for the $100K policy. Do I lose anything by changing companies?

Answer:
There are two main types of life insurance. One is whole life, and the other is term life. Whole life policies are permanent forms of life insurance that build cash value and pay out upon death or often at age 100 (whichever comes first). Term life insurance is a temporary form of life insurance meant to provide coverage for a specific time period when you have a need for protection now that you wont have later on. Term life products often come in terms of one, five, 10, and 20 years. Term life products do not build cash value. One major benefit of a term life product is its affordability. Often at a younger age, you may purchase a higher amount of coverage for less than a whole life product. However, the premium on term insurance goes up over time, eventually exceeding the cost of a whole life policy and then becoming too expensive for most to afford. Also, a lot of term insurance will have reduced benefits at retirement age and some will even completely cancel. That is also why life insurance provided by your employer is often called group term life. When you leave your employer for any reason, you lose it.

I would recommend that you compare the policies side by side to see what benefits each offers and the conditions and limitations outlined. Also you have to be very careful when switching insurance companies especially when you are offered a lower rate for more coverage. Often, you get what you pay for. If you are looking for a cheaper rate and don’t care about service, you will get more coverage for your dollar. However, it may take a long time before they pay claims and they may not help you when you need to make changes to your policy. Some companies who provide cheap insurance may try to get out of paying claims. Companies who sell cheap insurance may go out of business if claims come in quicker than the company can collect premium. Also the cheaper the insurance, the less likely it is that you will ever see an agent. The company that I work for isn’t the cheapest on the market, but we still believe in the handshake and face to face interactions. Also we pay claims on average in under 8 days. We are also the only company whose group term product for employees is a permanent coverage to age 100 and is 100% portable, meaning that you can take it with you when you leave your employer, keeping your full coverage amount and your premiums never increase. And because we don’t advertise, we use those millions of dollars in extra savings to provide free introductory offers, such as our free $3,000 accident policy that covers your whole family.

So now you should have a good idea of what Term life insurance is and how it compares to Whole life insurance. Also, I have shown you how big of a difference there is in customer service based on how much you are willing to pay for your life insurance.

And most importantly, never be afraid to ask a lot of questions to get the answers you need when choosing between companies.