Kinds of Term Life Insurance

Type's of Pure Term Life Insurance

• Annual renewable term insurance. This provides coverage for a year and you have the option to renew for another year when the coverage expires. Premiums are also reviewed annually and the insurance company may require underwriting and medical examinations as part of the process. There are some versions of this that guarantees reinsurability – meaning, you can still renew the coverage, but there may be changes in the premiums.

• Level term life insurance. This insurance product provides guaranteed premiums for the life of the policy. Some level term life insurance policies give you the option to renew the coverage. However, renewal is not guaranteed as the insurance company may reserve the right to deny the coverage (which will be the case if the Insured turns out to be in poor health).

• Decreasing life insurance. This type of insurance is commonly used to cover debt. As debt is paid off, you will need less and less insurance to cover the debt. For instance, if you pay your mortgage amortizations over the years, your level of debt will also decrease over the years.

• Increasing life insurance. This type of insurance is for those who are concerned about inflation and how it will affect the future proceeds of life insurance. The sum insured is programmed to increase by a certain amount or percentage.

Anand Khemka
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