Term Life Insurance

Death benefits for life insurance coverage remain the same for the entire period as defined by the policy but the premiums can be adjusted each year and will typically increase with the age of the insured.

Although the cost of premiums will usually remain the same for an extended period, the payment for death benefits will decrease in value over the relevant term. This is an excellent choice for individuals who have financial obligations that will naturally decrease over time.

Married and common law couples can purchase joint (or first-to-die) term life insurance policy to provide protection for loved ones in case of an untimely death of either partner. This type of term policy is especially useful for providing for your children’s education or similar expenses where all or a part of the payment would have come from the deceased’s future earnings.

This is a more complex term life policy that is something of a hybrid. Although the cost is much higher than premiums for traditional term coverage, the insured can get his or her premiums back once the policy has matured. Typically, ROP policies are only useful for insuring young, healthy income producers.

Both level term insurance with a fixed amount for payment of benefits and decreasing term insurance with benefit payments designed to satisfy a balance due can be effectively used for mortgage protection in case of an unexpected death.

This is an application of term insurance to protect a business in case of the loss income or profit due to the death of key personnel such as an upper-level executive or salesperson. The death benefit is intended to protect business operations during an interim period. Sometimes, key man term insurance can be used in conjunction with a buy/sell agreement to furnish a cash payment used to repurchase the deceased’s stock or ownership interests.