Different forms of term life insurance
Life insurance provides options in general, but as we narrow the focus to term life insurance, there are still plenty of policies to choose from. In fact, there are three main types. Below you can learn a little bit more about each of these types of term life insurance.
The most common type of term life insurance policy is a level policy. This is the best type of policy for a person that wants to know exactly what they are getting when they buy term life insurance. With a level policy, a person pays an unchanging premium. The policy payments stay the same, as does the level of the death benefit. These policies are most commonly in durations of 25 years, but can be found in ten years of term coverage.
Annually Renewable Term Life Insurance
Term life insurance policies will often be more expensive for people as they grow older. Annually renewable term life insurance reflects this. These policies last in one-year terms. If you wish to maintain your policy at the end of the year, you can renew the coverage. However, the premium increases, because of your increased age. There are even cases, where you can find these types of term life insurance policies, where they renew every few years. Most policies will become ineligible for renewal after an allotted time period.
Decreasing Term Life Insurance
Decreasing term life insurance works in a different way than the previously mentioned types. This is one of the most competitive term life insurance types. By decreasing the benefits the longer the policy holder lives, this type of term life insurance is one of the most affordable.
There is logic behind every type of term life insurance policy. This type of policy works for people that expect their liabilities to decrease as they grow older. In other words, kids leave home, mortgages get paid off, and fewer years of life are ahead. Many customers take the strategy of purchasing different lengths of decreasing term life insurance policies. If a policy holder has 30, 20, and ten year policies, their beneficiaries can collect on whatever policies are still available, when a policy holder passes on.