What Are the Types of Term Insurance?
- Level term refers to a policy in which the death benefit remains the same for the life of the policy. If you buy a level term policy with a death benefit of $250,000 and a 15-year term, the death benefit paid would be the same for the entire 15-year policy term.
- Renewable term life insurance can be renewed upon expiration of the current term. This type of insurance can be an appropriate choice for those with an ongoing need for life insurance.
- Convertible term life insurance is a type of policy that can be converted to permanent life insurance when the policy term expires. This ensures that the coverage cannot be canceled and that coverage cannot be denied due to health problems.
- With a decreasing term life insurance policy, the amount of the death benefit will decline over the years. This type of coverage can be a good choice for those with a specific goal in mind, such as providing enough money to pay off the mortgage if the main breadwinner dies. While the death benefit amount steadily declines with this type of term life coverage the actual premium usually stays the same.
- With the return of premium feature, policyholders have the ability to recover some of the premiums they have paid throughout the years if a claim hasn't been made. This type of coverage can sometimes be a good choice, but it often costs significantly more than other types of term life coverage.
- A 15-year term life insurance policy can be a great way to provide protection for minor children until they are old enough to live independently. If for instance, your youngest child is 5, buying a 15-year term life policy would provide important protection until that child is out of high school and on the way to, or in, college.
- One of the most important reasons for buying life insurance is to provide protection to your family and help them pay the monthly bills if you die. Chances are one of the biggest bills your family would face is the mortgage payment, so many people choose a 30-year term life insurance policy that is sufficient to pay off the home if the policyholder dies. Since so many mortgages are written with a 30-year fixed term, a 30-year term life insurance policy can make a lot of sense.
