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Back..  Term Life Insurance FAQs

 

What is level term assurance?
This is an insurance policy where the premiums don’t change over the term. If you were to purchase a 10-year level term policy, you will pay the same premium for all of those 10 years.

What is decreasing term assurance?
Decreasing term assurance has a sum assured which reduces each year, or sometimes each month, by a stated amount. The assured sum will have decreased to nil by the end of the term.

Can I make my term life insurance plan permanent?
Some term life insurance policies can be converted into permanent ones, but the terms will often change.

What does annual renewable mean?
This is another type of life insurance that will cover you for one year. The premium for this policy increases every year.

Why would someone want to purchase annual renewable term?
An example of a situation where you would want to purchase annual renewable term is if you have a business start-up loan that will be paid off in within two years. In this instance you might want to purchase insurance to pay the bill in the event that something happens to you. You might also want to purchase annual renewable if you have a limited life expectancy. In this instance you might not be bothered by the steep increase in later years. The renewal price in this instance could be triple the amount of the original price so weigh out your options before committing to anything.

When would I want to choose level term insurance?
Level term insurance would be the best option for you if you were young. It may not build cash value but it does provide a high face value that would help your loved ones if something were to happen to you. If you’re looking to find something that will cover you better later in life, it may be that you want to look at other options.

Can I get my money back at the end of my term?
Most term life insurance will not give you money back at the end of the term but there are some that do. Most will have an option for you to renew the policy for a new term. Read the terms of the policy before agreeing to a new term, as this information will affect your loved ones if something happens to you.