Term life is a type of insurance coverage that is in effect for a designated "term." The cost of the premium is based on the expected likelihood of that happening during the coverage term. If the insured dies during the policy term, the death benefit is paid to the policy beneficiaries. If the insured dies even one hour after the policy term ends, no benefits are paid.
Perhaps an insured individual is diagnosed with a terminal illness during the coverage term but does not die while covered. Because of the illness, it is unlikely that the provider will renew the policy or issue a new one, deeming the applicant uninsurable. That is why a key factor in obtaining life insurance is insurability of the applicant.
A policy holder can get guaranteed re-insurability. One type of term insurance that falls into this category is annual renewable term life (ART). The premium is paid for a year's coverage and comes with a guarantee of renewal every year for a pre-determined number of years.
The policy renewal term is good until the policy holder reaches a certain age, generally age 95 but the terms can range from 10 to 30 years. The premium rate increases each time the policy is renewed, which results in the cost of an annual renewable life policy to eventually exceed that of a regular permanent policy.
Some people prefer other forms of renewable term life insurance where the renewals occur at multiple year intervals instead of each year as with the ART. This makes it easier on the wallet because the rates increase every few years instead of annually when the policy is renewed.
Reasons to Have Annual Renewable Term Insurance
You probably do not want this type of life insurance if you have a business loan you expect to pay off in a couple of years. Renewable term insurance is an option to cover the debt in case something happens to you. You can simply choose not to renew it once the loan is paid in full. Another reason is due to illness as mentioned earlier and it is the only insurance you can get when the term expires.
Decreasing Term Insurance
Decreasing term life insurance is another option to consider when your renewable policy expires. With this type of policy, the benefit value of the policy decreases but your premium cost stays the same. Keep in mind, however, that the policy over the long term will eventually become worthless.
Choosing the Right Policy Type
Your age, health, lifestyle, and the amount of coverage you need are some of the things that must be considered when choosing the best policy for you. Of course if you are dealing with a company that offers term life only, they are going to naturally do everything they can to sell you that type of policy.
Explore the different types of life insurance policies available, and then discuss your options with a reputable and versatile life insurance provider who will help you find the best coverage at the best price that fulfills your needs. Doing some research first will always help ensure that you are planning for all the possibilities the future may hold.
Perhaps an insured individual is diagnosed with a terminal illness during the coverage term but does not die while covered. Because of the illness, it is unlikely that the provider will renew the policy or issue a new one, deeming the applicant uninsurable. That is why a key factor in obtaining life insurance is insurability of the applicant.
A policy holder can get guaranteed re-insurability. One type of term insurance that falls into this category is annual renewable term life (ART). The premium is paid for a year's coverage and comes with a guarantee of renewal every year for a pre-determined number of years.
The policy renewal term is good until the policy holder reaches a certain age, generally age 95 but the terms can range from 10 to 30 years. The premium rate increases each time the policy is renewed, which results in the cost of an annual renewable life policy to eventually exceed that of a regular permanent policy.
Some people prefer other forms of renewable term life insurance where the renewals occur at multiple year intervals instead of each year as with the ART. This makes it easier on the wallet because the rates increase every few years instead of annually when the policy is renewed.
Reasons to Have Annual Renewable Term Insurance
You probably do not want this type of life insurance if you have a business loan you expect to pay off in a couple of years. Renewable term insurance is an option to cover the debt in case something happens to you. You can simply choose not to renew it once the loan is paid in full. Another reason is due to illness as mentioned earlier and it is the only insurance you can get when the term expires.
Decreasing Term Insurance
Decreasing term life insurance is another option to consider when your renewable policy expires. With this type of policy, the benefit value of the policy decreases but your premium cost stays the same. Keep in mind, however, that the policy over the long term will eventually become worthless.
Choosing the Right Policy Type
Your age, health, lifestyle, and the amount of coverage you need are some of the things that must be considered when choosing the best policy for you. Of course if you are dealing with a company that offers term life only, they are going to naturally do everything they can to sell you that type of policy.
Explore the different types of life insurance policies available, and then discuss your options with a reputable and versatile life insurance provider who will help you find the best coverage at the best price that fulfills your needs. Doing some research first will always help ensure that you are planning for all the possibilities the future may hold.
About the Author:
My Insurance Expert will help you find term life insurance that fits all of your individual needs. The world of life insurance doesn't have to be difficult. With the right advisor you can give your family the protection they need and have peace of mind.
