Term life insurance is less expensive than a permanent life insurance policy, but its premiums generally increase over time in tandem with the age of the policyholder. But some term policies have premiums that are guaranteed not to change up to a certain period; such policies are a little more expensive.
The shortest term life insurance coverage is five years, but policyholders may also select coverage that lasts 10, 15, 20 or 30 years. Some companies even offer up to 35 years of coverage. And some companies offer “return of premium” life insurance. In those cases, if the policyholder is alive when the term expires, the insurance company reimburses the premium payments to the policyholder.
Benefits of term life insurance:
- Term life insurance is flexible: When you can’t buy any new life insurance because you have uninsurable medical conditions, you can convert your term policy into permanent life insurance at the premium rate of your current age.
- Term life insurance pays a death benefit.
- Term life insurance allows you to choose the length and coverage of the insurance.
- Term life insurance helps you protect and get approved for certain business loans.