Term Life Insurance
Term life insurance is temporary insurance and the most affordable type of life insurance available. Each year, a premium is paid to cover the risk of death during that year. Term life insurance has no cash value. The only way to collect anything is to die before the term life insurance expires. If death occurs, the life insurance beneficiary generally collects the death benefit of the life insurance policy, free of income tax.
Guaranteed Level Term Life Insurance
Guaranteed level term life insurance is the most common type of term life insurance. It is popular because of the extremely low cost and long term coverage it provides. These types of life insurance policies have premiums that are designed to remain level for a period of 5, 10, 15, 20, 25 or even 30 years.
Return of Premium Term Life Insurance
Return of premium term life insurance (ROP) is a type of life insurance policy that offers a guaranteed refund of the life insurance premiums at the end of the term period, assuming the insured is still living. This type of term life insurance policy is a bit more expensive than traditional term life insurance, but the premiums are designed to remain level. They are often significantly less expensive than permanent types of life insurance, yet, like many permanent policies, they still may offer cash surrender values if the insured doesn't die. Return of premium term life insurance policies are available in 15, 20, or 30-year terms.
Annually Renewable Term Life Insurance
Annually renewable term life insurance (ART) is a type of term life insurance policy that has increasing premiums. The premiums increase each year to reflect the probability of your death in any given year.
This type of term life insurance policy is unpopular and usually only purchased when the coverage is needed for one year or less. This happens most often in business deals.