| Term Life Insurance is the lowest priced life | | | | without having to take a physical exam or provide |
| insurance that is available to consumers. Unlike | | | | proof that you are still insurable. You would still |
| Whole Life Insurance, Term provides no Cash | | | | have regular increases in your premium amount |
| Value. This means that there are no funds building | | | | as you grow older, but not because your health |
| while you pay your insurance payments | | | | may be suffering. One common type of |
| (premiums). Term is what is known as "pure" life | | | | Renewable Term Life is called "Annual Renewable". |
| insurance, with 100% of the premiums paid going | | | | The premium on an Annual Renewable Term |
| toward the payment of your policy. | | | | policy will automatically go up each year. Other |
| A Whole Life insurance policy will build a Cash | | | | types of Renewable Premium Plans include; Five |
| Value because a portion of the premiums paid go | | | | Year, Ten Year and Twenty Year Renewable |
| toward the policy fund and the other portion go | | | | Term. |
| toward the payment of the insurance coverage. | | | | #4. Non-Convertible/Non-Renewable - This type |
| Term life provides you with more Face Value | | | | of Term insurance will expire at the end of a |
| coverage than other types of life insurance, for a | | | | given time. Example, 10-Year Term. It costs more |
| "given" dollar premium. | | | | than Re-Entry Term Insurance, but is less |
| There are five main types of Term Life insurance | | | | expensive than Renewable Term. |
| available, although there are other variables, such | | | | #5. Convertible Term Insurance - This type of |
| as Level Term, Decreasing Term and Increasing | | | | Term has what is known as a "conversion" |
| Term (The latter is only available as a "Rider"), | | | | privilege. This means that you may convert this |
| we'll just focus on these main five for right now. | | | | policy to a policy with a higher premium, such as |
| #1. Deposit Term Insurance - This is a 10 year | | | | Endowment or Whole Life. You can do this at any |
| renewable policy where you will make a security | | | | time that you wish and your new premium would |
| deposit at the time of purchase. The insurance | | | | be based upon your age at the time of the |
| company will return the entire amount of the | | | | conversion. A reason for doing this would be so |
| deposit, plus interest, as long as the policy is | | | | you may purchase a more "permanent" plan. Your |
| maintained for at least 10 years. | | | | health would not make difference in the premium |
| #2. Re-Entry Term Insurance - This is the least | | | | costs at the time of the conversion. |
| expensive type of Term. You can purchase | | | | An example reason for buying Convertible Term |
| Re-Entry at what are known as "select rates", | | | | Life Insurance might be a young man or woman |
| which are less expensive than standard rates. | | | | that buys a policy in order to take care of their |
| Each time the "Term" of the policy is up, you'll | | | | final expenses and debts, just in case of the |
| need to submit proof that you're still in good | | | | unexpected happening. When this young person |
| health in order to receive the select rates, which | | | | grew older and married, then they may want to |
| must be done by completing a physical exam. If | | | | convert their Term policy into something with a |
| you're not still in good health, then you must | | | | long term Cash Value, while still maintaining the |
| continue to pay the amount (premium) on the | | | | original Face Value of the policy. The only |
| original Term policy. | | | | difference would be an increase in premium |
| #3. Renewable Term Insurance - You may renew | | | | payments. |
| this type of policy at the end of the policy term | | | | |