Term life insurance is one of the best ways to protect your family or business because you can buy large amounts of coverage at very low rates. When most people think of term life insurance they think of level term but there are several other types of term insurance available. Other term life options include, annual renewable term (ART), decreasing term, return of premium (ROP) term, and lifetime guaranteed term insurance. Following is a brief description of each kind of term policy.
Level Term Life Insurance
Level term life insurance, by far the most popular type of term policy, provides a guaranteed coverage amount at a fixed price for a specific time period. Level term life is available in guaranteed periods of 5, 10, 15, 20, 25 and 30 years. Rates are based on your age, gender, lifestyle and health as well as the length of the guaranteed term period. The longer the level term period the more you will have to pay for the policy. For more information see, what is level term life insurance?
Annual Renewable Term Life Insurance (ART)
Annual renewable term is life insurance that covers you for a one year period at a guaranteed rate. After the first year, the policy can be continued but premiums will increase annually. In many cases, annual renewable term policies offer the cheapest rates over the first few policy years. However, as you get older, premiums begin to increase dramatically and may become significantly more expensive than other level term options. For more information see, what is annual renewable term life insurance?
Decreasing Term Life Insurance
Decreasing term life insurance provides coverage at a fixed price but the insurance amount decreases over life of the policy. In the past, decreasing term has been popular for protecting mortgage loans because the decreasing benefit could mirror a reducing mortgage balance. In theory, you would pay a lower rate over the life of the policy because of coverage decreases. However, since low cost level term has become so competitive, decreasing term insurance has lost its appeal. In fact, in many cases level term policies are cheaper than decreasing term policies.
Return of Premium Term Life Insurance (ROP Term)
Return of premium term life insurance, commonly referred to as ROP term or “money back” term, offers guaranteed level premiums with the ability to build cash value and a feature that returns 100% of all premiums at the end of the level period. ROP term provides the best of both worlds: low guaranteed premiums and the ability to get a complete refund of those premiums when the level term expires. Mortgage protection is a situation where return of premium term insurance fits perfectly. For additional ROP term details see, what is return of premium term life insurance?
Lifetime Guaranteed Term Insurance
Lifetime guaranteed term insurance offers a fixed “term-like” premium with an insurance benefit that is fixed for your entire life. Lifetime guaranteed term, also referred to as “term insurance to age 100”, differs from level term insurance in that premiums are guaranteed not to increase. Because the coverage is guaranteed, the cost for lifetime coverage can be considerably more expensive. However, when compare to whole life, lifetime guaranteed term is significantly cheaper. To learn more see, what is lifetime guaranteed term insurance?
When most people shop for term life insurance, they look for level term insurance. However, there are several other types of term life insurance including annual renewable term, ROP term, term insurance to age 100 and decreasing term. The type of policy that makes the most sense for you will depend on what you are trying to accomplish. At MEG Financial, we offer each of the term policies above as well as other competitive life insurance options. Contact MEG Financial today at toll free (877) 583-3955, and our independent professionals will provide customs quotes given your objectives.