Tuesday, December 13, 2005

Term Insurance: 2 Types

From last Monday we started our weekly posting on various kinds of Life insurance because we felt that many of us just do the 'buying' part of the life insurance but continue to carry the misconception that we are well protected. Today we discuss 2 different types of Term Insurance.

Annual Renewable Term: These policies provide a level death benefit you can renew each year (until about age 80) without a medical exam. Annual renewable term insurance is best suited for people with short-term coverage needs because the premium generally increases each policy anniversary. Despite this, annual renewable term is normally the most affordable type of life insurance.

Level Term: These types of policies provide a level death benefit, and may be suitable if you have a young family and need affordible protection over a set number of years. Unlike annual renewable term, where premiums increase annually, level term premiums remain the same throughout the level premium period. Typical terms periods include 5, 10, 15, 20 and 30 years.


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