Basic guide to decreasing life insurance

Term Life Insurance – What is It & Who is it For

People are always asking me “what is this Term Life insurance I here about”? Is it as cheap as I have been told and If it is, can it any any Good?

So, here is my answer…

Decreasing Term life insurance is sometimes referred to as pure insurance, for it provides pure insurance protection only, the policy’s death benefit. Unlike cash value policies like whole life, universal life and variable life, there is no cash value accumulation within a term life policy.

Decreasing Term life insurance remains in force for a predetermined period of time and at the end of the stated period the coverage expires. You may choose terms of one, five, ten years or even longer and many may be renewed at the end of each stated policy term, with a new premium based on your current age. Often these guaranteed renewable provisions do not require proof of the current medical condition, protecting the insured from an uninsurability issue due to a decline in health.

Term life insurance is less costly than permanent life insurance in the early years, but in the later years of the policy the premiums can often become quite prohibitive due to increased age.To combat the ever increasing premium, many companies offer a level premium where the insured pays the same premium throughout length the term. By simply paying a slightly higher premium during the early years the insured avoids the sharply higher premiums of the latter years.

In a level term policy, protection can be set to meet your needs and keeps the amount of insurance protection level throughout the term. A decreasing term policy reduces gradually throughout the term and may be used to protect a declining need such as a home mortgage or another financial commitment that shrinks over a period of time. In order to keep the level of protection up with inflation a increasing term policy may be just the thing.

Combination policies are quite common today. With a combination of term and permanent insurance, more immediate protection can be acquired at a considerable savings in premium. In order to accomplish this goal the term insurance is added to the permanent insurance policy as a rider.

Often term insurance policies include a conversion option witch allows the policy holder to convert the existing term coverage to permanent insurance thereby gaining a level premium for life based usually upon the attained age of the insured at the time of conversion. This not only stops the premium increases but also now provides a savings element to enjoy a build up of cash value within the policy.

Young persons just setting out in their chosen career and families with growing children, often find term insurance an attractive choice to obtain valuable coverage sooner than might otherwise be possible. They know it will also provide them priceless protection against the possibility of becoming uninsurable later in life due to poor health.

Before purchasing any life insurance product, be sure to speak with a qualified, licensed professional in your state. It is always wise to investigate your options before you buy!