A policy is referred to a printed document issued to the policyholder by the insurance company. The document states the terms of the whole insurance contract. The terms stated on the document include features on the premium, death benefit, cash value utilization options & various other benefits.
There are various types of policies available to benefit the consumer today. Term life insurance is such a type of insurance policy that benefits the insured in many ways.
Term insurance is the simplest form of life insurance available for the consumers today. The policy is dedicated towards paying in case death occurs during the term of the policy. The term of the policy is usually from one to 30-years. This policy does not include any other benefit provisions.
Term life Insurance policies are basically of four types:
- Renewable term insurance: This policy works towards eradicating your requirements to succumb to a physical examination on renewal of your policy. In this case the company consents on renewing the policy even in case of the insured person’s decline in health. However, one must be thoroughly ready to pay high premiums with each renewable during the purchase of this plan.
- Convertible term insurance: This policy offers an access to the buyer to change from term to permanent life insurance with no requirement of failing to a health inspection. The best part is that as soon as your conversion to a permanent plan occurs, it would not increase your premiums even if you opt for the renewal of the term plan.
- Level term insurance: This type of a term policy offers a permanent premium for a previously stipulated period of years. The period of time is usually 10 or 20 years and the benefit of death in this case remains the same. This policy will lock you in particular price for the tenure of the policy. One flipside of this plan is that the rate would significantly rise in case you plan to renew with other policies.
- Decreasing term insurance: This policy can be bought with as less as $250, 000 worth of coverage to start with. Under this policy, the death benefit would decease throughout the policy. In case you start off your policy with $250, 000 worth coverage, your benefit will be decreased by $10, 000.
Decide on buying the term policy that suits your budget & requirements. This would facilitate you to enjoy the investment you make.