Preferred Financial Group

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Frequently Asked Questions

"What Types Of Term Policies Exist?"

 

Essentially, there are three types, or categories, of term life insurance, each with a its own relationship between premium and death benefit. An explanation of each type and the premium/death benefit relationships follow:

 

Level Term: The premium and death benefit remain the same for the entire length of the term.

 

Annual Renewable Term: The death benefit remains the same throughout the term, but each year, the premium will increase. Initially, you can expect to pay a premium that is lower than a level term premium, but over time it will become more expensive.

 

Decreasing Term: The premium remains the same throughout the term, but each year the death benefit decreases until it becomes zero, at which time the policy ends.