Types of Term Life Insurance
The most important thing you do while buying your life insurance is choosing the life insurance policy that best fits you. There are a lot of types of life insurance but all life insurance policies refer either to term life insurance or whole life insurance.
Term life insurance provides coverage only for a specified period of time and ceases when the period is over. You need to renew your life insurance policy otherwise your coverage ends. Your beneficiaries are paid only if you die withing the specified period. Life insurance companies may offer you the following types of term life insurance:
- Group term life insurance – group term life insurance is provided for a group of people (usually employees of the same company). Group term life insurance is cheaper as this type of term life insurance involves less administrative work
- Joint term life insurance provides coverage for both husband and wife under one life insurance plan. You have to pay only one life insurance premium for both of you.
- Level term life insurance is a type of term life insurance that resembles whole life insurance but covers only a specified period of your life. Like whole life insurance level term life insurance implies that your premiums stay level.
- Annual term life insurance covers you life for a year and at the end of the year you have an opportunity to renew your life insurance policy. This type of term life insurance is preferred when you expect that you life is in danger for a certain period: you are involved into a dangerous occupation, you are currently going into extreme sports, etc.
- There are other types of term life insurance that usually provide coverage for a longer period (for 10, 15, 20, etc years).
Get term life insurance explained:
- Advantages of term life insurance:
- Term life insurance is a cheap life insurance (as there are no cash values)
- People often choose term life insurance because of mortgage protection
- Term life insurance provides coverage during child rearing years
- Term life insurance can be renewed after the specified period is over
- Disadvantage of term life insurance:
- Notwithstanding the fact that term life insurance can be renewed your life insurance premiums typically increase each time you renew the coverage
- Some term life insurance policies are available only until a certain age.
- Your beneficiaries won’t get anything if you die the day after your life insurance coverage is over
