After weighing the options between term life insurance and permanent life insurance, you may have made the first decision, but now you have to make another decision. You have to decide which type of term life insurance policy to invest in. Different term life insurance policies come with different lengths of time you could be covered for and different benefits. Choosing the term life insurance policy that works against your unique situation could lead to unfavorable outcomes. Consider working with one of our Tennessee bankruptcy lawyers if you have questions about your financial situation.
What is Term Life Insurance?
Term life insurance is a type of life insurance coverage that is cheaper than permanent life insurance plans but comes with a time limit. Unlike permanent life insurance plans, which last as long as you continue to pay them, term life insurance plans will eventually expire regardless of the circumstances.
The downside of choosing term life insurance is that this plan could expire before you pass away. There are specific reasons why many people choose this plan over others. For example, people who are going to be in situations in which their lives could be at risk may purchase term life insurance for the sake of their families. Term life insurance is also cheaper compared to other types of life insurance.
Within term life insurance, there are two main subtypes to choose from that are called level term insurance and decreasing term insurance. Level term life insurance policies offer the same benefits if you pass away during any time within the designated term. A term could mean five or 10 years depending on the type you choose. Decreasing term life insurance means your benefits will decrease over time up to and until your death.
Subtypes of Term Life Insurance
There are other less common subtypes of term life insurance to choose from. Each has its own perks and downsides. Renewable term insurance is less popular now but offers you the chance to renew your life insurance benefits if the time period of your life insurance ends. You can renew life insurance in this case by paying the premium.
Return of premium is a subtype of term insurance that will actually refund your paid premiums when the level time period ends. You may or may not be refunded the full premiums you paid, depending on the individual terms and circumstances. One downside to this option is this subtype is more expensive. The last subtype is called convertible term insurance and allows you to convert a term life insurance plan to a permanent life insurance plan.
Bankruptcy Lawyers in Chattanooga, TN
Deciding which subtype of term life insurance could best benefit you and your family can be a challenging choice to make. Our team of lawyers has assisted clients from Chattanooga, Tennessee, and North Georgia with bankruptcy and financial issues in Tennessee. We can help you make smart investment decisions that will benefit your future.
Contact a Bankruptcy attorney in Tennessee at (423) 424-3116 today for a free consultation or feel free to send us any questions you have on our contact page. You can find our Tennessee bankruptcy attorneys in Chattanooga, Kingsport, and Tullahoma.