The mortgage term, which is sometimes referred to as the decreasing term, is the exact
opposite of the increasing term. It's done in a way that the death benefit amount decreases
over time. This is to match the death benefit with the decrease of the policyholder's outstanding
mortgage amount. The idea is that you don't need as much life insurance if you have less mortgage
debt, but the word decreasing may deceive some people,
as the premiums are smaller than the normal term insurance but do remain constant over the entire term even as the death benefit declines. The last type is the annual renewal, which each year renews the term insurance for a higher premium since the policyholder is a year older.
The main benefit of annual renewable is that the coverage is guaranteed to be approved every
year, but clearly this may not be a financially suitable option for everyone, since the premiums
do increase with every year's renewal. Once you have chosen the most suitable insurance option
for you, make sure that you check out our video on the best life insurance companies in the US.
So let's go over the main points we mentioned in this video, shall we?
Term insurance is a type of life insurance that provides coverage for a specific number of years. If the insured dies
within that period, a death benefit is given to the policy beneficiary. But if the policy expires,
a death benefit will not be paid. There are several types of term insurance policies that provide
different benefits based on the different needs of potential policyholders.
Some of these term life policies offer decreasing or increasing benefits over time, as well as the option to convert from term to whole life insurance. If you like this
video, make sure that you demolish that like button subscribe and hit that bell button to receive
notifications about our most recent videos.