3 Types Of Term Life Insurance?
The three main types of term life insurance are:
- Level term life insurance: This type of term life insurance provides a fixed death benefit for the entire term of the policy. Level term life insurance is typically the most affordable type of term life insurance.
- Decreasing term life insurance: This type of term life insurance provides a death benefit that decreases over time. Decreasing term life insurance is often used to cover a specific financial need, such as a mortgage.
- Renewable term life insurance: This type of term life insurance allows you to renew the policy for additional terms at the end of the initial term. Renewable term life insurance premiums typically increase each time the policy is renewed.
In addition to these three main types of term life insurance, there are a number of other types of term life insurance available, such as:
- Return of premium term life insurance: This type of term life insurance returns a portion or all of the premiums you paid if you die during the term of the policy.
- Convertible term life insurance: This type of term life insurance allows you to convert the policy to a permanent life insurance policy without having to take a medical exam.
- Guaranteed issue term life insurance: This type of term life insurance is available to people who have health problems or other risk factors that would make it difficult to qualify for traditional term life insurance.
The best type of term life insurance for you will depend on your individual needs and circumstances. It is important to compare quotes from multiple insurance companies and choose the policy that best meets your needs.
Here are some additional things to consider when choosing a term life insurance policy:
- Amount of coverage: How much coverage do you need? Consider your current financial obligations and your future goals when determining your coverage needs.
- Term length: How long do you need coverage for? Choose a term length that meets your needs. For example, if you have young children, you may want to choose a term length that will cover them until they are out of college.
- Premium: How much can you afford to pay in premiums? Term life insurance premiums can vary depending on the insurance company, the amount of coverage, and the term length.
- Riders: There are a number of riders available for term life insurance policies, such as riders that provide coverage for chronic illness or accidental death. Consider which riders are important to you and add them to your policy.
It is important to note that term life insurance does not build cash value. This means that if you outlive the term of the policy, you will not receive any money back. However, term life insurance is typically very affordable, which makes it a good option for people on a budget.