Decreasing Term Insurance
For individuals who are seeking life insurance to cover large financial expenses and debts, decreasing term life insurance may be the ideal solution. This is kind of life insurance is one in which the benefit payout decreases throughout the term, while the premiums remain the same. Decreasing term life is often used to cover the policy owner's large debts, such as a mortgage or college tuition. For these types of policies, the term periods are typically between 10 and 30 years.
The primary advantage of decreasing term life insurance is that this type of term policy is affordable. Because the benefit amounts decrease over the course of the policy, insurance companies can offer this kind of policy at reasonable rates. Also, decreasing term life insurance may help an individual secure a mortgage for real property, because the insurance serves as an additional guarantee that the loan will be paid in the event of the policyholder's death.
While decreasing term insurance is an affordable form of insurance, this type of insurance can prove more costly; if the policy owner outlives the term period, he or she will receive nothing for premium payments. This form of term life, unlike permanent life insurance, does not have a cash option, meaning that policy owners do not build cash value over the coverage period as with permanent life insurance. Decreasing term life insurance remains a popular, cheap alternative, however, for potential purchasers who seek the security of life insurance, but do not want to incur the costs of permanent life insurance.
Term Life Insurance Directory