Term Life Insurance

Different types of term insurance

You’ve reached a point where you just need insurance protection for a specific period of time. Term insurance provides exactly that, giving protection typically from one to 30 years. It pays a death benefit only if you die during this term. Some term insurance coverage can be automatically renewed at the end of the coverage period, and some can be converted to permanent insurance without need for a medical exam. Our QuoteRack insurance and finance specialists can help you with various options for term insurance coverage for both consumers and businesses.

There are several different types of term insurance you can consider:

Renewable Term Insurance

This short term life insurance coverage has a provision allowing you to renew coverage at the end of the term without having to show evidence of insurability. The company has to renew your policy even if your medical condition has deteriorated. However, the premium rate will rise with each renewal.

“I own a small business with some key executives, plus I had just acquired a new mortgage. A QuoteRack insurance and finance specialist helped me comprehend and apply the various solutions, term insurance provided, for my key executives and my mortgage”

Convertible Term Insurance

This term insurance coverage allows you to convert your term coverage into a flexible premium permanent policy or standard life insurance, without providing evidence of insurability. Premiums for convertible term policies are usually higher than for nonconvertible policies. Once converted, the premiums for the permanent coverage will be higher than those of the term policy with the same death benefit. However, the permanent policy premiums can remain the same or be flexible, while the term premiums will rise.

Level Term Insurance

This term insurance coverage provide a fixed premium for a certain number of years, usually 10 or 20 years, while the death benefit remains unchanged. The death benefit is the amount the life insurance company will pay, as stated in the policy, when the insured person dies. The advantage is that you lock in a certain rate for the period of the policy. The disadvantage is that the premiums will tend to cost more than the earlier years of the renewable policy, and when the level policy expires, premium rates will jump considerably if you want to renew with another level policy.

Decreasing Term Insurance

The death benefit in this type of term insurance coverage decreases over its term. For example, you might start with $100,000 of coverage and the amount of coverage decreases by $10,000 each year for 10 years. The premium usually remains the same over the term of the policy. This type of insurance allows you to pay the same premium for less insurance over time, rather than have your premium increase for the same amount of insurance.

Increasing Term Insurance

This type of term life insurance coverage starts at one level of death benefit which gradually increases over the life of the policy. You may start with a $100,000 policy and increase the death benefit $10,000 each year for 10 years. The premium will increase each year. This kind of policy may be appropriate if you see your insurance needs growing in coming years because, for example, you expect to have more children.

Other categories of protection are also available from QuoteRack, including Mortgage Protection Insurance, Health Savings Accounts and Key Person Life Insurance – we can help you obtain quotes for each of these products.