Term Life Insurance Lowdown

Types of Term Life

-- By Pushpa Sathish, Staff Writer

When shopping for a term life insurance policy, bear in mind that there are three main kinds available:

• Level Term: While the death benefit remains the same for the full period of the term, the premiums stay the same for the entire period, stay the same for a certain period, or increase as the term goes by.
• Decreasing Term: The death benefit decreases as the term goes on while premiums remain the same for the entire term. This type of insurance is ideal for those who have financial obligations that decrease with the passage of time. 
• Annual Renewable Term: The death benefit remains the same for the entire period of the term while the premiums increase gradually.

Terms of a Term Life

When taking out a term life policy, there are a few issues that need to be considered before you decide on the length of the term.

• Take stock of your outstanding debts and loans, and work out how much money your dependents will need to pay them off in the event of your death.
• Consider the number of years your children or dependents will take to become financially self-sufficient.
• Look at your financial needs and those of your dependents.
• And last, but certainly not the least, decide on your policy only after you have checked out various options.