When One-Size-Fit-All Insurance Doesn’t Cut It: 6 Types of Term Insurance You Can Pick From | brokeGIRLrich
When shopping for life insurance, you’ll ultimately end up choosing from two broad options; whole/permanent life insurance and term life insurance.
While whole life policies are quite popular, more and more people are realizing that these one-size-fit-all covers aren’t all that. You end up paying more over the period of coverage because of additional fees, maintenance, and overall higher premiums.
Term life insurance is a lot more affordable because it’s a stripped down form of insurance. Even better, as long as you keep paying your premiums, if you die within the policy term, your beneficiaries will receive a death benefit. Keep in mind that you can also convert your term life policy into a whole life cover once the term ends.
If interested, the following are six common types of term insurance to consider purchasing for yourself or a loved one.
- Level Term Life Insurance
Level term insurance is characterized by yearly premiums that remain the same during the term of the policy. Whether it’s a one year, 10-year, or 30-year policy, you’ll pay the same premiums every year until that period ends. The majority of level term insurance policies offer renewal option. Some also allow policyholders to convert to a whole life policy.
- Increasing Term Life Insurance
As we’ve mentioned, all term life policies offer a death benefit. Increasing term policies stand out because the death benefit increases each year you have the policy. Of course, your premiums also go up yearly. The death benefit typically increases at a predetermined rate of between 2-10%.
- Decreasing Term Life Insurance
Pretty much the opposite of increasing term life policies, in decreasing term policies, the death benefit reduces every year at a predetermined rate. This type of insurance is often recommended for families repaying a mortgage snortrescue.org/online-revia where the amount owed reduces each year. When you die, beneficiaries will receive what is left on the policy.
- Renewable Term Policies
As the name suggests, renewable term life insurance policies allow you to extend the life of the policy beyond the initial term. Yes, other types of life insurance can also be renewed, but here, you don’t need a medical exam. Some even renew automatically. With other term policies, you must pass a medical exam to be allowed to renew your insurance.
- Convertible Term Life Insurance
A convertible term policy gives you the right to convert your term policy into a permanent or whole life policy. There are rules to be followed, however. For instance, you can only convert to a whole life policy of equal value. Also, you may only be able to convert your policy before the age of 65.
- Hybrid Term Life Insurance
Finally, you can also purchase a hybrid term life insurance. Modified term policies can be both renewed and converted. So, for instance, after the initial term ends, you can renew the policy. Then, after the extended term ends, you can decide to convert to a whole life policy.
Now, Go Ahead and Choose
Whichever option you go with; the flexibility of term life insurance is something you’ll certainly enjoy.
About AEGON Life
AEGON Life Insurance Company Limited launched its pan-India operations in July 2008 with a vision to be the most recommended new age life insurance Company. AEGON is one of the world’s leading financial services organizations (providing life insurance, pension plans, and asset management) and Bennett, Coleman & Company (India’s leading media conglomerate) have come together to launch AEGON Life Insurance. This joint venture adopts a local approach with the power of global expertise to facilitate a direct to customer approach, leveraging digital platforms to bring transparent solutions to customers and to prioritize their needs.
Life insurance is one of those non-tangible products that we all need. Term life insurance is the only type of insurance me, and my wife has for years now, and ours is a 25-year renewable. Thanks for this reminder post, it may be a good time for me to review our policy.