Although term life is generally the least expensive type of life insurance on the marketplace, variations in the type of term are likely to have an impact from the overall cost of the policy when you ask for a quote. There are three major types of term life: level, decreasing and increasing. All three types will have variations in the actual premium quoted.
Level term life insurance means that the death benefit stays exactly the same for the term of the policy. If you purchase a $100, 000 policy for any 10-year term, the insurance company agrees to pay the full death benefit should you die any time during the 10 years. Premiums quoted are usually level too, staying the same for the duration of the policy
Decreasing term life insurance coverage means that the death benefit will decrease a set amount over every year of the term. Assume you purchase $100, 000 of decreasing term for ten years. Built into the policy is a reduction of the policy by $10, 000 every year. This means that the value of the policy will be 0 at the conclusion of the term. Decreasing term insurance is often recommended for people who've a mortgage. Since the balance on the mortgage decreases over time, it seems sensible to have insurance that does the same. Premiums quoted for this kind of policy are usually lower than for level or increasing term, and usually stay exactly the same over the life of the policy.
Increasing term life insurance means how the death benefit will increase a set amount over each year of the word. For example, you can purchase $100, 000 of increasing term for ten years at an annual increase of 5%. This would provide you with a death benefit which will keep pace with or slightly exceed inflation. Some policies of this type are associated with a standard index, such as the cost of living. The premiums quoted for increasing term usually go up combined with the coverage.
When getting quotes for term life insurance policies be sure you understand the three types of terms available - so that you will be sure to get a quote tailored to your specific needs.
Level term life insurance means that the death benefit stays exactly the same for the term of the policy. If you purchase a $100, 000 policy for any 10-year term, the insurance company agrees to pay the full death benefit should you die any time during the 10 years. Premiums quoted are usually level too, staying the same for the duration of the policy
Decreasing term life insurance coverage means that the death benefit will decrease a set amount over every year of the term. Assume you purchase $100, 000 of decreasing term for ten years. Built into the policy is a reduction of the policy by $10, 000 every year. This means that the value of the policy will be 0 at the conclusion of the term. Decreasing term insurance is often recommended for people who've a mortgage. Since the balance on the mortgage decreases over time, it seems sensible to have insurance that does the same. Premiums quoted for this kind of policy are usually lower than for level or increasing term, and usually stay exactly the same over the life of the policy.
Increasing term life insurance means how the death benefit will increase a set amount over each year of the word. For example, you can purchase $100, 000 of increasing term for ten years at an annual increase of 5%. This would provide you with a death benefit which will keep pace with or slightly exceed inflation. Some policies of this type are associated with a standard index, such as the cost of living. The premiums quoted for increasing term usually go up combined with the coverage.
When getting quotes for term life insurance policies be sure you understand the three types of terms available - so that you will be sure to get a quote tailored to your specific needs.
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