Exploring the various types of term life insurance

Term life insurance is the most basic form of life insurance. With term life insurance, you pay for insurance coverage for a specified amount of time. When you die within the coverage period, the insurance will kick in to pay the death benefit.

There are no cash values built up, just pure protection (for the basic term life insurance policy). After the term is up, you can either allow it to lapse, renew it, extend it and in some cases, convert it into a whole life policy.

When the policy is renewed, you usually would have to pay a different premium (more expensive than the previous one). This is because the older you are, the higher risk you present.

But even with this no-frills policy, there still are some varieties that are designed to meet specific needs. Here, we will have a look at the different types of term insurance:

Level term

Decreasing term

Increasing term

Renewable term

Convertible term

How does term life cover compare?

Updated on: 03.06.2013

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*Scottish Provident 2012 life cover claims paid report.