In order to meet the differing needs of many individuals and families there are now many types of term life insurance policies available. This is because the protection each policy holder needs is different. So in order to get the most from a term life insurance policy you need to consider your needs and look at which temporary policy you should opt for.
There are a number of reasons as to why you may opt to take out term life insurance as opposed to any other form of life insurance. For example one of the most popular reasons is thanks to the fact you can take this form of insurance out for as long as you need to. It isn’t a permanent form of insurance, hence it’s name, term, you take it out for a term of time such as ten, twenty or thirty years; it gives you coverage for the time that you need it most. Also the rates of this policy are the cheapest when compared with other forms, which is also a bonus! But even if you do choose to take out this policy you then need to decide which form of term insurance you actually want to take out. So what exactly are the different types of term life insurance that are available?
In my experience there are three different term life insurance policies that stand out. These three policies are the most popular of this type of coverage and are as follows:
Level – with this term coverage the amount of death benefit that you will purchase will stay the same for the entire time you have the policy. So for example if you had taken the policy out for twenty years the death benefit you purchased would remain the same for the entire twenty years. Also the premiums that would be paid for this policy may also stay the same for the amount of years you have the policy for, but this is only a maybe as there is a chance they may increase over time.
Decreasing – this type of policy is generally only purchased by people who have financial obligations that will decrease over time such as a mortgage or a personal/business loan. As the name suggests, the amount of death benefit that you purchase will decrease over the time that you have taken the policy out for. The premiums for this policy will however remain the same throughout the time that you have the policy for.
Annual renewable – with this version of the coverage the amount of death benefit that you purchase will remain the same for the time frame that you have the policy for. The premiums however will increase every year. It should be noted that this form of term policy is not that readily available anymore but you may still be able to get a hold of it.
You need to make sure that before you make a decision as to which policy you take out that you consider these different types of policies. Add up the pros and cons of each in association to your own individual circumstances. Only by doing this will you truly be able to figure out which version of this coverage will best fit your needs. It is only by doing this that you will get the best term life insurance deal so start thinking now.