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What is insurability? In life insurance, insurability refers to whether or not you can be approved for coverage by an insurance company. Your mortality risk determines your insurability for life insurance. Let’s discuss locking in insurability. 

For example, someone with a terminal illness and an estimated six months left to live is uninsurable for a new term life insurance policy. This is because their probability of dying within the term is so high that they carry too much risk (too high of liability) for the life insurance company to insure.

However, this person, had they already owned the policy and then were diagnosed with the terminal illness, would still have coverage. Let’s talk more about locking in insurability.

Buying Term Life Insurance – Locking In Your Insurability and Price

Term life insurance is the best life insurance option for most individuals because of its affordability. What’s more, when you purchase your term life insurance policy, your premiums are locked in. As you age or develop any health issues, your premiums won’t change for the entire term.

Term life insurance provides coverage for a fixed period of years—this is your term. Term length options range from 10 to 40 years.

Ideally, you purchase a long enough term to cover the years when your protection needs are highest, such as when your family is growing and financial responsibilities outpace your income. Should the worst occur and you die unexpectedly, your paycheck is gone, but the term life insurance death benefit helps replace the lost income for your family.

Because of the affordability of term life insurance premiums, locking in insurability is ideal for those families on a budget and whose lives would be severely impacted if a provider died.

With term life insurance, your premiums are locked in. As you age or develop any health issues, your premiums won’t change for the entire term.

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Protection Against Health Changes

Age and health status are the most significant drivers of cost for a life insurance policy, and the biggest determinants of insurability. As you age, you’re more likely to develop health problems that could make life insurance insurability more expensive or even make you uninsurable.

Once you purchase your term policy, your coverage is in place with no cost increases for the entirety of the term, as long as you pay the premiums on time.

In addition, most term life insurance policies include a conversion feature. This means you can convert your term policy into a permanent policy before the term expires, without needing to prove you’re still insurable.

This conversion option can be extremely valuable if you do become uninsurable and need to continue coverage to protect your family. Converting to a permanent policy means you’ll have life insurance coverage for your entire life, as long as you pay the premiums on time. Permanent life insurance also provides cash value accumulation and can be an essential financial tool for estate planning.

Protection Against Job Changes

Many people believe they don’t need to buy an individual life insurance policy because they have coverage through their job. If you’re in this boat, and curious about insurability, don’t feel bad. Many people think this. However, it’s not true.

Unfortunately, group life insurance coverage through your employer only provides a death benefit 1-2 times your salary. This amount is not enough to support your loved ones after your death. Most individuals with loved ones depending on them need a death benefit that’s closer to 10-12 times your salary.

Also, a group life insurance plan is not portable. This means, if you leave your job, whether voluntarily or not, your coverage doesn’t follow you. Even if your group coverage allows conversion to a portable policy, this policy is often much more expensive than one would cost if you purchased from a life insurance broker.

Group life insurance coverage is a great benefit offered by employers. If your employer offers this free coverage, take advantage, but also purchase an individual term life insurance policy to supplement it. Your individual term policy follows you no matter where you go.

The Cost of an Individual Term Life Insurance Policy

Term life insurance is less expensive than permanent life insurance. Because the premiums are fixed, term life insurance is also easy to budget for.

The cost of life insurance is determined by your individual risk factors. Your age, health, occupation, and lifestyle (hobbies, tobacco use, alcohol use) can impact your longevity and, therefore, impacts your life insurance rate.

That being said, most Americans overestimate the cost of a term life insurance policy by three times the actual amount. So, for a term policy that actually costs $30 per month, most people would guess it costs $90.

Here at Quotacy, you can get term life insurance quotes instantly. No need to even enter contact information.

Don’t guess. Run some quotes and see how much (or how little) a term life insurance policy may cost you.

» Get Quotes: Term life insurance quotes

If you have loved ones relying on you, get term life insurance now. Buying a life insurance policy is easy on Quotacy. Apply online and then your agent will keep you updated as your application moves through the buying process.

If you need to take a medical exam, the examiner will come to your home or office, wherever is more convenient. Many insurance companies have implemented new processes which may eliminate a medical exam for you altogether. Your Quotacy agent will let you know if you qualify for this option.

Not sure how much life insurance you need? Visit our term life insurance needs calculator. Or, if you prefer to talk with an advisor, contact us directly. Since our agents don’t work on commission, you can rest assured that you won’t be sold a policy you don’t need.

The COVID-19 pandemic was a wake-up call for many families, revealing just how much uncertainty there is in nearly every aspect of our daily lives. For many Americans, the importance of life insurance has never been clearer.

Term life insurance in particular can provide an affordable way to lock in future insurability. It also can serve as a valuable part of your financial plan that includes protection for loved ones in the event of an unexpected death.

About the writer

Headshot of Natasha Cornelius, a life insurance writer, for Quotacy, Inc.

Natasha Cornelius

Marketing Content Manager

Natasha is a writer and content editor at Quotacy. She is also co-host of Quotacy’s YouTube series. She can't get enough of life insurance and outside of work is also working toward her Chartered Life Underwriter designation. Connect with her on LinkedIn.