Types

• There are three types of term life policies that applicants can choose to purchase: Level term, decreasing term and increasing term. Owners of decreasing term life policies pay premiums that gradually get lower over time. Increasing term policies, also considered standard term plans, start off with low premium amounts then steadily increase. Level term plans provide stable premium amounts for policy owners to pay for the life of the policies. Of the three policies, owners of level term plans pay the lowest premium amounts on average.
  
  

Features

• Applicants for term life insurance can choose different lengths of insurance coverage. These policies are generally bought for five, 10, 20 and 30 years or longer. Some term policies feature conversion and renewal options as well. Policy owners with conversion clauses can upgrade their insurance plans to permanent life coverage without providing evidence of insurability. Renewal clauses allow policy owners to add on additional years to their current policies without proving they are healthy.
  
  

Benefits

• One of the main benefits of term life insurance is its affordability. This is because term policies are "pure" insurance plans and don't come with any extra features such as investment options and cash value accounts that would raise its cost. Such features are found in permanent life policies. For instance, a healthy, nonsmoking male at age 40 can get a $250,000 20-year fixed term life policy from MetLife for only $350 a year compared to a universal life plan with the same benefit amount for $3,000 annually.
  
  

Considerations

• Term life insurers consider several important factors when determining to accept or deny applicants for insurance as well as premium amounts for those who qualify. These factors include gender, age, occupation, coverage amount, hobbies and health status. Those who are granted policies may pay higher or lower premiums than the insurer's standard rates according to their level of risk.
  
  

Warning

• Insureds have to provide evidence of insurability if they have to convert or renew their term life insurance policies outside of the designated periods authorized by their insurers. If insureds make the changes during these time periods but request an increase in their benefit amounts, insurers may require proof that they are still insurable.