Types of life insurance – life term insurance
Of all of the different types of life insurance that there are available in the market today the most simple, straight forward and popular is life term insurance. Life term insurance is the most widely purchased life insurance product and is available across the board from pretty much every insurance company. There are two categories of life term insurance policy and these are explained below in further detail.
Level life term insurance – When you choose this type of life insurance policy you pay a premium for a specific duration of time. During that period, your chosen beneficiary receives the benefits of your policy in the event of your death. When the policy expires the cover ceases but there is no money owed to the customer as they were paying for the assurance that the company would pay out should they have died during the term. The amount of cover remains the same, level, throughout the whole policy.
Decreasing life term insurance – This is much the same as level life term insurance, however as the name states there is a decreasing aspect and this is the death benefit. This policy is designed to work alongside a loan or mortgage that will decrease over time so the payout matches this. The premium will remain the same throughout the term of the policy however will be cheaper than that of a level life term insurance policy.
It is however a fact that life insurance companies will push these types of life insurance_ less than others such as whole of life insurance because the profit to be made from them, especially as there is no investment element, is low and as we all know these companies are much more into the big numbers!
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