UPDATED: Mar 26, 2020
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Of the many life insurance policies available in the market term life insurance is the most popular. It’s called term life insurance because, as the name implies, it is available for a specified term. The term period can range from 10 to 30 years. If the insured dies within the term of the policy, then the beneficiary is given the promised sum of money. Listed below are a few different types of term life insurance available.
Level Term Life
Level term life insurance is the most common type of term life insurance. Level term life insurance policies provide a fixed amount of coverage over a fixed amount of time. Anyone with this plan will enjoy a steady premium rate throughout the whole term. The advantage unique to this policy is that the premium remains the same throughout the term regardless of health changes. Many people find that level cost is their best option.
Renewable Term Life
If you buy a renewable term life insurance policy, you’ll have the option to continue coverage when the initial policy expires without having to prove insurability through a life insurance medical test. If you are not a fan of needles, this one may be the right choice for you. It should be noted, however, that when you renew the policy, your premium likely will be higher to account for your age. No exam term life insurance may also be a good idea.
No Medical Exam Term Life
No medical exam term life insurance is the fastest way to get a term life insurance policy. It is a time-efficient way to get the benefits you are looking for in an insurance policy. Like all life insurance, term life insurance no exam policies provide financial security for your loved ones in the event of your death. This way does not require a doctor’s visit, it shortens the application process and gives you the option for guaranteed coverage. The catch is that term life insurance with no exam does cost a bit more than fully underwritten life insurance policies requiring a physical examination.
Return of Premium Term Life
There is one main difference between the return of premium life insurance and other types of life policies. As with all insurance plans, with a return of premium policy, a death benefit is paid out should you pass away. But if you outlive your term, you get all of your money back. No matter what happens to you whether a claim is made while covered or if you outlive the policy money is distributed. If you like to keep your options open, this one is for you. The main reason people don’t get ROP term life insurance is that it costs more. The insurance companies that offer this product charge slightly more for it than for non-ROP term insurance.
Convertible Term Life
Convertible term life insurance is a hybrid of term and permanent life insurance. Term life insurance covers you for a given period. You pay the premiums and, if you die within that time frame, your beneficiaries get the money. With convertible term life insurance, you can initially purchase a term policy and then convert it to a permanent policy later. If you convert to a permanent policy when your term ends, you won’t be required to have another medical exam, although you will most likely be charged a higher rate. This kind of policy can be useful for those who want to remain eligible for life insurance no matter what occurs in the future.
You and your family deserve the protection and the peace that comes with term life insurance. Choosing the right type is important. Be sure to consult a licensed insurance professional who will help you find the best policy for you!