Different types of term life insurance policies

When choosing a life insurance, the first decision to make would be which term you want to apply. There are two types which are whole and insurance policies. Each one of these come with different terms and conditions. The term life insurance policy could be what many people are looking to go for and it […]

When choosing a life insurance, the first decision to make would be which term you want to apply. There are two types which are whole and insurance policies. Each one of these come with different terms and conditions. The term life insurance policy could be what many people are looking to go for and it comes in a variety of types. Many others come with different offers and one will only need to figure out which one of them will fit them. Below are some of the types of insurance that one can pick:

Guaranteed level insurance
This type of insurance is quite common among many people. It features some yearly premiums which will never increase during the time the policy is active. The drawback to this type of insurance is the fact that the policy has a defined expiration. Even though some policies come with clauses to renew the policy, there is no guarantee that this is likely to happen. The level insurance policy does not last for very many years. In most cases, it will go for about ten to twenty years. Also, the longer the term policy, the higher the premium will be for each year until it terminates.

Annual renewable insurance
This is the simplest form of life insurance for one term year. The policy can be renewed each year for a defined time length. Each time the policy is renewed, the premiums will go up and will continue to increase after the period between twenty to thirty years. The death benefit for this insurance will be paid is the insured died during the one year. If they do so a day after, then there will be no benefit payment.
The main challenge when renewing this policies is that there will be required to provide some proof of insurability. For instance, it is possible for one to acquire a terminal illness within the term year by then fail to die within it. Due to this illness, the purchaser will be uninsured after expiration of the first term and this means they will be unable to buy a new one.

Return of premium insurance
This form of insurance coverage provides a return of some of the premiums that were paid during the term policy. This is in the case where the insured will outlive the period of time for the insurance policy. This policy usually guarantees to return the premium making the assumption that the insured person is still living. These terms are available for 15, 20 or even 30 years. Although it is pricier than an insurance policy, it is cheaper than the whole life policy and comes with similar advantages

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