Different Types Of Term Life Policies
Do a term life insurance comparison and decide on the best term life insurance for yourself, your family and your business.
Don’t just buy any garden variety term life insurance policy…compare them all and find the best one.
The problem is that there about 2,000 life insurance companies and that would be quite a time consuming job for you.
Another thing to think about is that even if you were able to check them all out by the time you get to checking the last ones some of the first companies that you had already checked out would have changed their rates.
Why bother with the hassle, let the people who specialize in term life insurance compare information for you.
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Term Life Insurance Comparison
Let us, however, take the time to do a term life insurance comparison on each type of term life insurance so you can get a feel of what you are working with. We will begin with the decreasing term life insurance policy.
- Decreasing Term Life Insurance.
This type of life insurance can be bought either as a policy or as a rider to another policy, usually a whole life policy. The decreasing term life policy is usually bought for a 20 year or a 25 year period with the expressed intent of covering the balance owed on a mortgage. The face amount of this policy decreases each year until the end of the term period.
If the insured dies while the policy is in force the amount of insurance in force at that time is paid to the beneficiaries. Homeowners who have a mortgage find this policy or rider quite attractive, as the amount paid upon death would be sufficient to pay off the balance owed on the mortgage. The premiums are quite low. As far as a term life insurance comparison is concerned no policy can compare.
- Yearly Renewable Term Life Insurance
This one again is in a class by itself. There is no policy to do a term life insurance comparison with. This is one of the cheapest term policies in the beginning. Each year the premiums increase. This eventually makes this term life policy one of the most expensive life insurance policies that you can buy.
It usually contains a conversion privilege. If you buy such a policy because it is so cheap I recommend that you take advantage of the conversion privilege and change it to another type of insurance at the earliest possible date. The face amount of this policy remains level for the entire term period.
- 5 Year Level Term Life Insurance
If you made a term life insurance comparison between the yearly renewable term and the five year level term you would notice that they are similar in every respect, except that the premiums for the five year term remain level for the entire five year period.
Like the increasing premium term life insurance policy the death benefit remains level for the duration. If you have a need for short term insurance, may be to cover an outstanding loan, this is a good policy to buy…
There is also a conversion privilege. Let us suppose while you own this policy you discover that you have a terminal illness, you still have the right to convert this policy to a permanent policy without evidence of insure-ability.
The premiums for a permanent policy are much higher. You would prudently convert to this permanent policy rather than let the five year period run out and then die without any life insurance.
- 10 Year Level Term Life Insurance
Let us make a term life insurance comparison between the 5 year term life insurance policy and the ten year term life insurance policy. The ten year term life insurance policy is slightly more expensive than the 5 year term.
The premiums remain level for ten years and so does the death benefit. This is a good choice as you have a little more time to enjoy the low rates before you convert to another type of insurance.
- 20 Year Level Term Life Insurance
If you did a term life insurance comparison between this and any of the other policies you would likely conclude that this is the ideal type of life insurance for most people.
The death benefit remains level for 20 years. With some companies the premiums remain level for the entire 20 year period, but with others it increases after 10 years. In some cases it increases again at 15 years. Regardless of the increases the premiums are fairly inexpensive.
See the results of a term life insurance comparison between many term life insurance policies in different life insurance companies :