What are the different kinds of life insurance?

Term life insurance provides protection for a specified amount of time (or term) and pays benefits only if the individual dies during that period. Term policies can be sold in terms of number of years like (1 year, 5 year, or 10 year) or in terms of individual�s age (term to age 50, or term to age 65). There are three basic types of term insurance: Level term insurance- provides a level amount of protections throughout life of the policy Decreasing term insurance- provides protection in which the amount gradually decreases throughout the life of the policy. This coverage is typically sold for individuals that want to protect family members from current liabilities such as a mortgage. As the mortgage is paid off the need for the higher payout upon death is reduced therefore this coverage decreases not only the payout upon death as time goes by but also has lower premiums. Increasing term insurance- As you may have guessed this policy is the opposite of decreasing term insurance. In this form the protection gradually increases over the life of the policy. Generally the idea here is to keep pace with inflation or cost of living expenses.

Briefly, the three major types of life insurance are:

• Level term life insurance where your premiums remain the same during the entire term period

• Annually renewable term life insurance where the premiums increase each year of the term.

• Return of Premiums (ROP) term life insurance where at the end of the term the sum of all premiums paid are returned to you

Term life insurance is the best choice for people who would like to pay low premiums but provide high insurance coverage for their family. Before deciding on the type of term life, you should consider factors like renewability privileges, waiver of premiums factor, etc.