Increasing Term Life Insurance Options in Oklahoma?
Reader’s Question:
I’m thinking of either getting an increasing or decreasing term life insurance in Oklahoma. Could you tell me how these two differ from each other?
Lorie
Lawton, OK
Increasing term life insurance is also called yearly renewable term policy or annual renewable term. The face amount of this policy, which is also called death benefits, remains level or does not increase over time as long as you continue paying your premiums. Upon the death of the policyholder, the face amount or death benefit is paid to the beneficiary in a form of monthly income or in one lump sum. The reason why it is called increasing term life insurance is because its premium increases every year. The life insurance company is charging the premiums according to the life expectancy of the policy holder for a particular year.
Decreasing term life insurance has a level life insurance premium this means that the life insurance premium does not increase. The death benefits on the other hand decreases over the period of the policy in a uniform amount. The death benefit decreases in the same manner as the mortgage balance decreases. This policy is also called a basic mortgage protection life insurance.