- Decreasing Term Life Insurance Policy
One policy that sets itself apart from all other types of life insurance policies is
decreasing term life insurance.
As the name implies the face amount of the policy gradually decreases over the years. The most common area where your need for life insurance decreases is when a policy is used to erase a mortgage debt when the homeowner dies. This policy perfectly fits that type of situation. The premium remains level for the duration.
All other life insurance policies are level death benefit policies but each of them have unique twists that policy buyers may find useful.
-
Yearly Renewable Term
Policy
This type of policy has a level death benefit as mentioned before, however, the premium increases every year if you choose to keep the policy. Here you have a one year
term policy
with the option of renewing it every year. Because you are older you pay the premium for the older age. This is
life insurance
in it's purest form. You would use this to pay off outstanding debt in the event of your death.
-
5 Year
And
10 Year Term
Policies
These types of life insurance policies maintain a level death benefit for 5 or 10 years...depending on which policy you choose. These policies are also used to take care of fairly short term life insurance needs. You will find these level premiums to be quite inexpensive.
- 15 Year, 20 Year, 25 Year And 30 Year Term Policies
A greater number of these types of life insurance policies that we are about to discuss are sold than any other. These are
level premium term policies
designed to take care of long term life insurance needs. Your choice would depend on how many years you need to be covered...
Let us assume you are using this policy for
family protection.
You have a child 3 or 4 years old. You need to be assured that the child and surviving parent can attain all desired goals in the event of the death of the insured. Because you want to provide sufficient cash or income at least until the child graduates college a 20 or a
25 year term
policy would fit the bill. Had the child been older you could use the
15 year term
policy.
- Whole Life, Universal Life, Variable Universal Life And Variable Life Policies
The premiums for these types of policies are much higher than those of the term policies...but they can fulfill an important need. If you have a desire to accumulate some cash through your
life insurance policy
these are the policies designed for that. You can use the
whole life policy
and the
universal life policies
as vehicles through which you can save money. The returns are not very high on these types of life insurance policies though...
You have a better chance getting a high return on your money if you invested in a
variable universal life insurance
policy or a
variable life policy.
These types of life insurance policies are sold by prospectus only and the agent needs an
NASD
licence before he can discus them with you.
