Buying level term life insurance is a simple matter if we know exactly what type we want before hand. There are several types to choose from; each serving a different need and each bought for a different purpose. Let us take some time to examine some of the most popular level term life insurance policies. We will start with the least expensive.
Increasing Premium Term Insurance
The increasing premium term policy, or yearly renewable term, at the outset is one of the most inexpensive that you can buy. The premium is so low that one would not think twice about such a purchase. Don’t let that fool you. This premium increases every year and if you keep the policy for a long period of time it will turn out to be quite expensive insurance. The face amount remains level for the duration. If you have a need to own insurance for a short period of time then this may be what you are looking for.
5 Year Term Insurance
5 year level term life insurance is also a short term policy designed to fulfill a short term need. It contains a level death benefit. The premiums for this type of insurance also remains level. They never increase. This is truly cheap life insurance. This can be used to cover outstanding loan balances or to guarantee that a plea is completed even if the insured dies. Let us suppose you plan to pay for a college education for a child or grandchild who will begin their further studies within a year or two. You want to know that even if you died your wish will become reality. A 5 year level term policy may be what you are looking for.
10 Year Term Insurance
You have to lay out a little more in premiums if you choose the 10 year level term life insurance policy. This policy also has a level premium which you can keep paying for 10 years. The death benefit is also level throughout the life of the policy. This policy is fairly inexpensive and can be used to cover outstanding loan balances, to fund buy-sell agreements in the early years of a business or even in family situations. Like most term policies this policy can be converted to permanent insurance at any time during the life of the policy.
20 Year Term Insurance
One of the best loved policies is the 20 year level term life insurance policy. As the name implies you can keep it for 20 years and the face amount remains level for the entire period. The premium is a little more than the 10 year policy but it is also level. This policy can also be converted to a permanent type policy at any time. Business people use this a lot as a floating debt policy. In case of death the bank will get back their money. If they have a valuable key employee they buy a policy on his or her life so that adjustment will be easier in the event of this persons death. This policy is also used a lot in family situations to guarantee the spouse and children sufficient income if the breadwinner should die prematurely.
30 Year Term Insurance
Used for similar reasons as the 20 year term is the 30 year level term life insurance policy. The death benefit also remains level for the duration and so does the premium. This policy can be kept for 30 years and also has a built in conversion privilege.
These are the best known and most bought level term life insurance policies. The last three are the most bought by people who have a preference for term insurance.