Term life insurance is the second excellent option for those who can’t purchase whole life insurance. There are several reasons why you should purchase term life insurance. However, you need to look at the different types of term life insurance before moving to purchase one.
Keep reading to learn the different options available for you.
Types of Term Life Insurance
Level term plans
A level-term plan is the most prevalent form of life insurance coverage insurers give. In this plan, the sum insured selected at the commencement of the policy remains constant throughout the policy period. The younger you are when obtaining a level term plan, the lesser your premium will be.
Increasing term life plans
You can enhance your guaranteed sum at any point throughout the policy duration with this type of insurance. This plan is an excellent method to keep up with rising costs. Simultaneously, you also ensure that your family has enough money to live comfortably after inflation.
An expanding term insurance policy is appropriate if you foresee a large rise in your financial commitments. The period of this type of term plan is usually longer than that of other types of term insurance.
Decreasing term life plans
In this case, unlike growing term insurance, the sum assured decreases at a predetermined rate as you become older. It is predicated on the assumption that as you become older, your commitments will decrease. It is a fantastic choice for you if you have a loan or a mortgage that you aim to pay off soon.
Convertible term plans
A policyholder may convert a convertible term insurance plan into another type of insurance later. If you expect your financial priorities to vary in the coming years, this long-term strategy is acceptable.
Return of Premium term plans
A return of premium plan, a new and popular type of term plan, provides you with a savings component. You will get a refund of all premiums paid up to the maturity date if you outlive your insurance term. However, you will only get your money back if you haven’t made any claims throughout the insurance period.
