Types of Term Life Insurance

Life insurance can be a tricky type of insurance to buy. There are two distinct types of life insurance – term life insurance and permanent life insurance – and life insurance is sold in two different ways with individual life insurance policies and group life insurance policies. With individual life insurance you have complete control over the entire process and choose the life insurance provider, your life insurance plan and the exact mix of benefits and features to meet your life insurance needs. Group life insurance can come from your employer or organizations you might belong to. Each way to buy life insurance comes with its own advantages and disadvantages.

Taking stock of all these options makes it clear buying life insurance requires some background research from you to determine what type of insurance best meets the needs of you and your family and then which is the best way for you to buy life insurance. Be sure to compare life insurance quotes to find the best deal when you are ready to buy life insurance.

To get you started on life insurance research, here’s an introduction to the types of term life insurance:

Term life insurance can be broken down into two groups – level term and decreasing term. By far the most common type of life insurance is level term. The difference between level term and decreasing term life insurance is the amount of the death benefit. Level term life insurance pays the same death benefit amount throughout the term of the life insurance policy.

Level term life insurance can be further broken down into a number of types. These include: yearly, or annually, renewable term, 5-year renewable term, 10-year term, 15-year term, 20-year term, 25-year term, 30-year term and term to a specific age, which is typically 65.

At one time yearly renewable term life insurance was the most popular, but now 20-year term life insurance is the most common. The year in year-based term life insurance refers to the length of time the premium remains the same. For 20-year term life insurance your premium would remain unchanged regardless of changes to your health or other factors. When the 20-year term expires you can renew the life insurance policy, but the premium will change to reflect your age and physical condition at the time the policy goes into effect.