Uses Of Level Term Insurance
Level term life insurance is attractive to most people as it is inexpensive and easy to understand.
The death benefit never decreases. There are several different types of term insurance policies to choose from.
Here are descriptions of each and available options.
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Level Term Life Insurance
- One Year Renewable Term
The one year term, yearly renewable term or increasing premium term can be bought as a policy or as a rider to a permanent policy. It is guaranteed level term insurance and is guaranteed renewable…which means that the death benefit never decreases as long as you make your premium payments. This is very cheap term life insurance initially but the premiums increase every year and…in the long run could turn out to be quite expensive. If you have a desire or need for short term insurance coverage this policy is for you. Here are two examples.
Outstanding Uninsured Debt
If you have outstanding debt and are concerned that your family will inherit this burden in the event of your premature death you could use the one year renewable term policy to pay off the debt.
Financial Commitments
There are certain things that we commit ourselves to in our daily lives. You may have a responsibility or commitment to take care of the college education of either your own child or a relatives child. You feel this young person has tremendous potential…you want him or her to succeed. Your death could shatter those dreams of yours and possibly those of the child. - 5 Year, 10 year, 15 year, 20 year, and 30 year Level Term Insurance
These level term insurance policies also maintain a guaranteed level death benefit. They usually only differ in duration and…because of this difference they are used for different needs.
Short Term Needs
The 5 year level term policy is level term life insurance and is usually used for short term needs similar to those mentioned for the one year renewable term policy. The premium for this policy, however remains level
Family Protection
The 10 year term policy can also be used if you have a need that will last a little longer. All the other level term life insurance policies you would use according to how long you anticipate your need for life insurance will last. If you are raising your children it is imperative that you own sufficient life insurance to guarantee that they will be taken care of…even if you are not there to do it yourself. The type you buy depends on the age of the child and how long s/he will be dependent on you. Another consideration of vital importance is the financial welfare of your spouse. S/he has to continue living. These level term life insurance policies can be used to provide either a lump sum or a monthly income for your spouse. There are several income choices.
Business Life Insurance
Business people use guaranteed level term life insurance to assure the continuation of their business in the event of the death of a partner, stock holder or key person. They more often than not select 10 year term, 15 year term, 20 year term or 30 year term policies. - Conversion Privilege
You have a contractual right to convert any of these policies to a permanent type of life insurance like…whole life insurance or universal life insurance. - Riders
To these level term life insurance policies you can add the waiver of premium rider as well as the accidental death benefit rider.