Term Life Insurance

Generally lower priced (initially) than permanent life insurance. Excellent option for younger insureds and those looking to use life insurance to pay off a specific amount of debt in the event of their death.  Can be considered “if I die” insurance whereas permanent life insurance could be considered “when I die” insurance.

1. Level Term:  Generally, level face amount with level premiums for a specified period of time (term), i.e. 10 year level term, 20 year level term, etc. Most Level Term policies become ART policies after the initial term expires. 
    
2. Annually Renewable Term, or ART:  Generally, level face amount with premiums increasing slightly each year.  Typically, slightly lower premiums than a level term policy in the initial few years.
    
3. Decreasing Term: Often sold as Mortgage Protection Insurance.  The face amount, or death benefit, reduces over a period of time, theoretically to coincide with a decreasing mortgage amortization. Premiums are usually level.  Advantage: Sometimes underwriting is more relaxed for these policies. Disadvantage: The decreasing death benefit can leave the policy owner with very little coverage in the waning years, albeit with the same premium!
    
4. Return of Premium Term:  Like Level Term, generally these policies have level face amounts and level premiums. Unlike Level Term, if you live to the end of the level term period, the company will refund to you in a lump sum payment all the premiums paid for the base policy.  Premiums are somewhat more expensive, but less expensive than permanent life insurance.