Term Life Insurance or Term has been the gold standard for majority of American’s life insurance needs for decades. Term is dependable, affordable, and has a relatively easy sign-up and underwriting process. Below we will describe various types of Term to help you figure out the best type of life insurance policy for your family’s needs.

The most common type of Term sold today is called Level Term, which means the annual or monthly premium stays the same for the life of the policy which is generally 10-30 years. Most families find it easier to budget with a predictable yearly premium. Level Term is most affordable when the insured is young and healthy and can easily qualify for the best health rating for the entire length of the policy.
The alternative to Level Term is Annual Renewable Term or ART which starts off with lower annual or monthly premiums which rise considerably as the insured ages. ART is cheaper than Level Term in the early years of the policy which make it suitable for clients who pursue lucrative careers which require lengthy schooling. The premium remains affordable during the insured’s schooling and the early years of his/her career. While ART sounds good on paper, we generally recommend clients start with an affordable Level Term policy during schooling and early years of their career and adding an additional policy as the insured’s career takes off.
There is yet another novel form of ART called Decreasing Term Insurance. DTI policies coverage decrease with time and is used to insure specific financial liabilities which decrease with time. The most common use of DTI is to insure mortgage liabilities. DTI’s aren’t always the best solution, often a standard Level Term or ART policy make more financial sense.

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