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Level Term Life Insurance – You are insured for the same amount throughout the agreed term.
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Renewable Term Life Insurance– You have the option, after a specified period (usually 5 years) to take out a further term life insurance policy without the need for any further evidence of health, provided the policy will not continue beyond a certain age (often 65 or more).
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Convertible Term Life Insurance – You can convert the life insurance policy to a whole life or endowment insurance without giving further evidence of your state of health. If you decide to convert, the new life insurance policy will usually cost the same as a normal whole life or endowment policy based on your age at the date when you exercise the option. If you have a young family and a limited income, these life insurance policies might be best. Not only do they provide cheap life insurance cover at the outset, but they also give you valuable options in later years if your income has risen or your health has declined.
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Decreasing Term Life Insurance – The sum insured reduces by a fixed amount each year, decreasing to nil at the end of the term. The premium will normally stay the same throughout the term.
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Increasing Term Life Insurance – The sum insured and premium increase each year by a fixed percentage of the original sum insured. These life insurance policies are designed to increase your insurance protection as your earnings increase.
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Family Income Benefit – If you die during the term of the policy, a regular income is paid to your dependants for the rest of the term. The income can be paid monthly, quarterly, or yearly. Some life insurance policies provide an income which increases each year at a fixed rate – say by 3% or 5%. |
