The Different Types of Life Insurance

The different types of life insurance

There are several different types of life insurance or life assurance and it is important to chose a policy that suits you and your needs.

Level Term Insurance

Level Term Insurance pays out a sum of money if the policy holder dies during the policys term. The amount that is paid out is guaranteed by the insurance company and will remain the same throughout the period of the policy.

Decreasing Term Life Insurance (or Mortgage Protection Cover)

Again, Decreasing Term Insurance pays out on the death of the policy holder, but unlike level term policies, the cover decreases over the term of the policy. This is designed to reflect the outstanding balance on a mortgage.

Renewable Term Insurance

Renewable term insurance is a level term insurance policy, but with the built in option to renew the policy at the end of the term, without undergoing any health screens.

Convertible Term Insurance

Convertible term insurance is like a level term insurance policy, but it allows you to convert to a whole life policy or an endowment policy. Convertible term insurance policies are designed for people who really would prefer to have a whole life insurance policy, but cannot afford the monthly premiums at this point of time, and so are given the option to upgrade at a later date.

Increasing Term Insurance

Increasing term insurance allows you to increase the amount that you are insured for at specific points during the policy. This type of policy is designed to combat inflation, always making sure that the value of the sum that you are insured for reflects your situation. This is especially important following the birth of a child or a marriage.