Term insurance is the simplest form of life insurance and will usually makes up the bulk of a younger families life insurance protection because of its low monthly cost.
pays only if death occurs during the term of the policy, which is
usually from one to 30 years. Most term policies have no other benefits like cash accumulation. Although some policies will let you convert your policy into whole life within certain guidlines.
There are two basic types of term life insurance policies—level term and annual renewable term.
Level term means that the death benefit and premium stays the same throughout the
duration of the policy. Most policies are purchase in 10 year increments of 10, 20, or 30 years.
Annual renewable term means that the death benefit and premium change every year over the course of the policy’s term. Typically, the premium increases as the person gets older and has a higher chance of dying.
In 2003, virtually all (97 percent) of the term life insurance bought
was level term.
Term insurance rates can vary greatly depending on your health and age. It is very cheap when you are young and healthy, but can be extremely expensive or impossible to get if you are too old or have health issues that present a high risk to insurance carriers.