Term life insurance is a type of insurance that provides a death benefit for a specific period, typically ranging from one to thirty years. There are two types of term life insurance policies: increasing and decreasing term life insurance. The main difference between these two types of policies is how the death benefit changes over time.
Increasing Term Life Insurance
With increasing term life insurance, the death benefit from the plan increases every year. This type of policy is less common than other types of term insurance. An increasing term life insurance policy may be suitable for people who plan on having a child in the future but would like to save money now while still getting the necessary coverage in the next few years.
Decreasing Term Life Insurance
In contrast to increasing term life insurance, a decreasing term insurance plan is designed to decrease coverage every year. This policy is ideal for people who purchase life insurance with mortgages in mind. These applicants intend to match the amount of their coverage to their mortgage loan. As their mortgage goes down, so will their insurance coverage.
Choosing The Right Policy
When deciding which policy is best for you, you need to consider several factors. Firstly, consider how much coverage you need. Calculate all of your unpaid expenses and any other debts that would be left to your family if you were to pass away. The second factor to consider is how many people rely on your income. If you have kids and a spouse that depend on your salary, they will experience financial strain if you passed away. We suggest getting around 7-10 times your annual salary in life insurance coverage.
GetSure.org is here to help you choose the right life insurance policy for your needs. Contact us today and we can help you get affordable and quality life insurance that your family deserves.
|Increasing Term Life Insurance||Decreasing Term Life Insurance|
|The death benefit increases every year||The death benefit decreases every year|
|Suitable for people who plan on having a child in the future||Ideal for people who purchase life insurance with mortgages in mind|
|Less common than other types of term insurance|
- University of Michigan. Term Life Insurance: What It Is, Different Types, Pros And ...
- Investopedia. Different Types Of Life Insurance Explained
- OPM (Office of Personnel Management). Decreasing Term Insurance: Definition, Example, Pros & ...
- DFS (Department of Financial Services). Term Life Insurance
- Massachusetts government. Types Of Life Insurance