Term Life Insurance Articles
3 Popular Types Of Term Life Insurance Coverage
2010-12-03
Term life insurance is life insurance sold for a finite period of time. The premiums are based on the age, gender, and health of the applicant. Term life insurance is a popular life insurance choice since the premiums are lower than permanent life insurance. There are three types of term life insurance.
Guaranteed level term life insurance is the most popular form of life insurance. A premium amount is determined when the policy is initiated and stays at that same level for the life of the policy. The policies can range from five to 30 years in length. This kind of policy ensures that as you age and even if you develop a medical condition you won't pay more each year during the term of the policy. It is guaranteed that you can renew the policy at the end of the term but the premiums will undoubtedly be higher because you will be older.
A return of premium policy is a term life insurance policy that refunds the premiums paid at the end of the policy term. The premiums remain the same during the policy but they cost 25% to 50% more than other term life insurance coverage. The extra premium that is paid is invested by the insurer and the returns on the investment are used to return the premium amounts to the policyholder. These kinds of policies are 15 to 30 years in length. A longer term is less costly than a shorter term because there is more time for the investments to grow. This kind of policy might be taken out when it is not expected that the policyholder will die. Some parents buy the policy for young children as an investment since they don't expect that the worst could happen and the benefits of the policy would need to be claimed.
An annually renewable term life insurance policy is reviewed each year to determine the risk the insurer faces. The premiums may go up each year on the renewal date. This kind of policy is not purchased as commonly as a guaranteed term policy. With this policy you can buy the greatest amount of coverage for the least amount of money. It is sometimes used for short term insurance in business transactions where the owner or principal member of an organization needs a short term policy to protect the business.
When deciding which of these popular life insurance policies is right for you take into consideration your age, your health and the premiums you must pay. The life insurance you choose should match your financial goals and provide protection for your assets and your family at the best rate possible.
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Term life insurance is life insurance sold for a finite period of time. The premiums are based on the age, gender, and health of the applicant. Term life insurance is a popular life insurance choice since the premiums are lower than permanent life insurance. There are three types of term life insurance.
Guaranteed level term life insurance is the most popular form of life insurance. A premium amount is determined when the policy is initiated and stays at that same level for the life of the policy. The policies can range from five to 30 years in length. This kind of policy ensures that as you age and even if you develop a medical condition you won't pay more each year during the term of the policy. It is guaranteed that you can renew the policy at the end of the term but the premiums will undoubtedly be higher because you will be older.
A return of premium policy is a term life insurance policy that refunds the premiums paid at the end of the policy term. The premiums remain the same during the policy but they cost 25% to 50% more than other term life insurance coverage. The extra premium that is paid is invested by the insurer and the returns on the investment are used to return the premium amounts to the policyholder. These kinds of policies are 15 to 30 years in length. A longer term is less costly than a shorter term because there is more time for the investments to grow. This kind of policy might be taken out when it is not expected that the policyholder will die. Some parents buy the policy for young children as an investment since they don't expect that the worst could happen and the benefits of the policy would need to be claimed.
An annually renewable term life insurance policy is reviewed each year to determine the risk the insurer faces. The premiums may go up each year on the renewal date. This kind of policy is not purchased as commonly as a guaranteed term policy. With this policy you can buy the greatest amount of coverage for the least amount of money. It is sometimes used for short term insurance in business transactions where the owner or principal member of an organization needs a short term policy to protect the business.
When deciding which of these popular life insurance policies is right for you take into consideration your age, your health and the premiums you must pay. The life insurance you choose should match your financial goals and provide protection for your assets and your family at the best rate possible.
