Types of Life Insurance

Term Life insurance provides coverage for a set period, typically between 10 and 30 years, before it expires. The death benefit may be fixed in some term policies, while it may decrease or increase in others as the policy ages. Premiums are usually, but not always, fixed, and a medical exam may or may not be required depending on the policy. Term Life insurance is suitable for those who only need coverage for a specific period and are looking for a more budget-friendly option. For example, family breadwinners might opt for a term policy during the years when their children are young or while they are still paying off their mortgage. Term Life insurance is meant to last for a specific number of years and then stop.

Some Term Life policies offer conversion options through a conversion rider, allowing you to switch to a permanent policy before the term ends. This may involve additional costs but can waive the need for extra medical exams. Not all insurance companies provide this option, so it is wise to check with your agent before purchasing term coverage.

Decreasing Term Life Insurance represents a specialised and practical variant within the realm of life insurance policies. Unlike traditional life insurance products where the death benefits remain constant over the policy term, Decreasing Term Life insurance is designed to cater to specific financial needs that diminish over time. This type of coverage is particularly well-suited for individuals with outstanding loans such as mortgages, whose outstanding balance decreases as payments are made.

As the name suggests, the death benefits in Decreasing Term Life insurance decrease gradually over the policy’s duration, aligning with the diminishing financial obligations of the policyholder. This structure allows policyholders to ensure that their loved ones are protected against the specific debts and financial responsibilities they wish to cover, providing a targeted and cost-effective solution. Decreasing Term Life insurance offers a pragmatic approach for those seeking to address time-sensitive financial commitments while simultaneously providing a valuable safety net for their beneficiaries.