Term Life Insurance Definition

Term Life Insurance Definition

Term Life Insurance Definition

You might want to know the right term life insurance definition since it is one of the main type of insurance that you might want to get. Since the one that you want to get is the term insurance, then the benefit that you will get is available in specific period. That period is the one that is called as the ‘term’ of the life insurance that you will get. However, after that specific term coming to an end, then it will be renewed, which usually happen annually. This type of life insurance policy is actually available for you until you reach 95 years old.

Types of Term Policy that You Can Get

There are actually two types of term policy that you can get, the first is the decreasing term and the second one is the level term. On the first type, then the death benefit that you will get will be going down or decreased over time even if you still pay the same premium amount, but the value of the money that you paid will be decreased over time.

On the second type, then the death benefit that you will get will actually stay the same. But on the premium about that you will pay will be varied. You can pay the same premium amount so the value will stay the same throughout the period that you get. But you can also pay increasing amount of premium every 5 years, so you need to pay more to get the same benefit as before.

On ideal situation, actually you need to get maximum years instead of getting the renewal option every time. That is why; paying attention to the policy option that you will get is very important for you in the future run. You will also need to see the conversion option that you can get.

Actually most of the policies will have conversion option which will allows you to convert your policy into permanent policy without having to have health screening. With this option, then your term policy will change type into universal policy or whole policy. When you choose to use this option, then you will need to pay higher premium to maintain the rate class that you have originally. It is important since then the rate class would not be based on the health status that you held currently.

This option is great if you hold a term policy but suddenly getting an illness which makes you unable to get a new policy or adding additional insurance anymore. You can easily convert the term policy that you currently hold into the other types of policies that you want so it will last for the rest of your life.

Usually the term insurance lengths which will be available are typically on 10, 20, 30 or 15 years. Some companies also offer 1 year term length and even 5 years or 25 years length. You can try to get the term length that is more suitable for your current conditions and need by searching suitable company with the right term.

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