Term Life Insurance

Term life is a type of life insurance that stays active for a predetermined period of time. If you have a term life policy, your loved ones will get a death benefit if you die while the policy is active. Not all term life policies are the same - policies have differences in payment structure and what happens when the term concludes.

How Does Term Life Insurance Work?

When you sign up, you have choices in how many years you want your policy to be active. Typically, a term life policy will last between 10 and 30 years. You’ll also choose a death benefit, which is an amount that will be given to your chosen beneficiaries.

Your company will then decide on the premiums based on these factors:
Whether you want level term, yearly renewable term, decreasing term, or convertible term

  • Age
  • Health
  • Hobbies
  • Occupation

If you are older, have a health condition, and have an unhealthy lifestyle, you will pay higher monthly premiums.

What Happens When the Term Ends?

After the term ends, you can terminate the policy, or renew it. You may convert it into a whole life insurance policy before the term ends.

Terminating the policy does not result in being refunded the premiums you paid throughout the term.

If you renew your policy, you will pay higher rates than you did when you initially obtained it. Renewal is not always guaranteed – your insurer can deny renewal.

Lastly, some term life policies will allow you to convert your term into a whole life policy.

What Are the Types of Term Life Insurance?

The types of term life are:

  • Level term
  • Yearly renewable term
  • Decreasing term
  • Convertible term


With level term policies, the premiums and death benefit remain the same throughout the course of the policy’s term. Rates are set according to anticipated increasing costs, which is why the premiums are initially higher.

Yearly renewable term policies are not set to be active for a certain number of years. Instead, you renew them each year, and you do not have to show proof of insurability. Premiums get higher each year.

Decreasing term policies don’t decrease the premiums. The premiums remain the same like a level term policy, except the death benefit gets increasingly lower each year.

Choosing to convert the term into a whole life policy will cause your premiums to increase, but only because of a fundamental chan

Is Term Life Insurance for You?

Alvarado Master Agency is here to help you find the most suitable life insurance policy you can get. If you’re looking for an insurance policy that you can pay low premiums on for a specified number of years, we are happy to provide that for you.

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