subject: Term Life Insurance- Characteristics of the Policy [print this page] Term Life Insurance- Characteristics of the Policy
Term life insurance policies are unique in the way that they operate. With a term policy, life insurance is purchased for a certain period of time based on what a person needs and what a company offers them. There are different types of term policies to choose from, but they all have the same basic characteristics:
-A fixed term period that a person has insurance coverage for. This policy generally comes in terms of 5 to 20 years, and is set to be paid until it expires.
-Increasing and decreasing term options are available. Increasing term coverage is designed to increase in value over time to provide more coverage over the years. As this occurs, the premium increases as well. Decreasing term policies are designed to provide a fixed payment from the date of death until a fixed future date, depending on the specific details of the policy.
-Conversion and renewability options included in the policy. Renewable insurance is designed to be renewed at the set term, but the premium will increase as the insured person ages. Conversion rights should be in the policy, as well, to allow people to convert their policy as needed.
Unlike whole life insurance, term policies will be specifically in effect for a limited period of time. These policies are generally best for people who are older or who will only need coverage for a short time. These policies typically cost more because premiums will remain the same over time unless you have an increasing or decreasing policy with your term life insurance coverage. These are important things to understand about term insurance when you are trying to determine the right type of insurance for your specific needs.
The characteristics of term life insurance are deeper than the time period that the policy is in effect or the options that you can find. You also have to look at policy limitations, exclusions, special riders that might be required, and other elements involved in the policy. You should take the time to talk to an agent or at least read through the policy carefully to make certain that you know exactly what you are getting for your money with your term life insurance policy. By exploring and researching your options, you will be able to have a much better idea of which life insurance is right for you and how to buy the right policy based on your needs.
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