Increasing Term Life Insurance

Increasing term insurance is the opposite of ecreasing term: the face value increases over the life of the policy, but the premium remains exactly the same. This type of term insurance is not used nearly as often as level or decreasing term.

Because all term insurance is temporary protection for you, it’s often used to cover temporary needs, such as mortgages or debts. Other advantages are its initial low cost for premiums, making it suitable for people with a need for insurance but with limited financial resources to pay the insurance premiums. Term insurance can be flexible; it can be used to provide additional protection for the insured. Situations and needs can change throughout a person’s life; term polices can be used to cover those needs.

There are some disadvantages to term life insurance, as well. Over a long period of time, renewable term insurance will become very expensive. This is because, although initially less, the premium of each renewal will increase based on the increased age of the insured. For decreasing term policies, although the premium remains the same, it pays for less and less actual coverage throughout the life of the policy. As previously stated, term insurance offers no benefits other than pure death protection. And even though policies can be renewable, they generally will not be renewed beyond 70 years of age, at the time when life insurance is needed most.