A life insurance policy comes in varied forms according to the product required by people. This is one of the many types of insurance covers offered by many companies. This policy can be offered for a range of terms like 10 up to 30 years. The cost varies according to factors depending on the calculated premiums paid annually.
A term life
insurance provides the insured with protection over a specific period.
This time is usually the length of the insurance cover. This cover is
cheaper to the insurer and does not incur costs like the policy
benefits. A 20 to 30-year term insurance policy may be very cheap
depending on health factors and the age of the insured.
Monthly coverage rates
insurance costs vary according to factors like the age of the person
and the amount of coverage purchased for the cover. For instance, a
policy offering $500,000 coverage will have monthly rates that are
generally lower when the policy is acquired at an early age. A
35-year-old can pay for a cover that is priced lowly monthly while for
an identical coverage amount a person at 50 will pay more monthly.
Level term insurance policy
cost of the insurance cover can be affected by a level term policy.
This will maintain the same type of coverage for the insured throughout
its term. The premium will also remain constant throughout the term.
This term cover may also have a term that lasts for 30 years. One
disadvantage is that when this policy expires it cannot be renewed.
Renewable term insurance
renewable term cover will contain a renewable option at the end of the
insurance. These renewable policies are usually sold in shorter terms of
10 to 15 years per policy. These covers are renewable up until a
specific age. These age limits can be 65 to 70 but they vary according
to the insurer. For an annual premium that is generally higher most term
policies can get renewed.
Term policy disadvantages
life policies do not have cash value that is built within the coverage.
As a result, an individual may pay annual premiums for the caver and
does not build any value into it. Other products of insurance like a
permanent life policy can be used to get a return on premiums. When the
insurer cancels a term life policy there is no built up cash value and
also no return on premiums. For the individual this means that he might
pay less annually for this kind of policy but get no benefits other than