Return of premium term life insurance coverage

That is what differentiates it from other forms of life insurance. Premium term life insurance has no equity or cash value accumulation and so it is primarily avail for the security provided by the death benefit. Hereunder are some facts about term life insurance.

After the initial level period expires, the annual premium increases each year, subject to a guaranteed maximum. Although the initial premium of a level term policy is higher than the initial premium of a yearly renewable term policy, the level term policy generally costs much less over a specified period of time. For example, compare the premiums between a yearly renewable term plan and a 20-year level premium term plan for $500,000 of life insurance.

Many term life insurance plans can be converted to permanent life insurance plans without evidence of insurability. Term life insurance provides protection for a specified period of time. A death benefit is paid to the beneficiary if the insured dies within a specified period of time while the policy is still in force. Yearly renewable term life insurance has premiums that are initially low.

However, the premiums increase substantially as the insured gets older. These plans have diminished in popularity due to the introduction of level premium term life insurance. Level premium term life insurance has premiums which remain level over a specified period of time.