subject: Life Insurance Policy –What Type is best for you? [print this page] Life Insurance Policy What Type is best for you?
Everyone wants to provide for their loved ones, but purchasing life insurance can be a very frustrating experience. Permanent life insurance, also called whole or universal insurance, is expensive because it provides lifetime coverage. A less expensive option is called term life insurance. This type only provides coverage for a certain period of time. There are several types of term life policies, including annual renewable, decreasing, and level premium. Before you purchase cheap term life insurance, know your options so that you get the best type for you. After you make your decision, you can contact a broker or search online to find the best deal.
The first type of term life insurance is called annual renewable term, or ART, life insurance. While some people choose to purchase life insurance in one-year increments, you can run into trouble if you contract a serious illness because you might become uninsurable. ART life insurance, on the other hand, is guaranteed renewable for the duration of the contract. You will still purchase your insurance every year, however. Before purchasing this type of cheap term life insurance, know your options. Your premiums will increase every year for the duration of the contract.
The second type of life insurance is called decreasing term insurance. This is actually a type of ART life insurance. Unlike most types of annual renewable term insurance, however, your premiums will not increase. Instead, your payout will decrease on a regular basis. Insurers believe that your need for a high payout decreases with age. This is yet another reason why you should look into several different types of cheap term life insurance. Know your options and do not purchase decreasing term insurance unless you already have another type of coverage.
Lastly, you might consider purchasing a type of term life called level premium insurance. As the name suggests, your premium will not change for the duration of your contract. To determine your premium level, insurers will calculate an average premium based on your age at the beginning and end of your contract. Longer contracts will have more expensive premiums. The advantage of this type of insurance is that you do not have to worry about sudden increases. You will pay more than others in the beginning, but less at the end of your contract. If you decide to buy cheap term life insurance, know your options to get the best plan for you and your family.
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