Term Life Insurance is the original form of life insurance which could be said to be insurance at its purest, as it does not build up cash value. Term Life Insurance covers one for a specified period of time. Once the term period is over the policyholder could choose between letting the policy go and continuing the coverage with increased premiums, paying them annually.
If the insured happens to die in the given period then the beneficiary would be able to accrue the benefits via payments made to him or her. It could be said to be the cheapest form of insurance or buying a considerable death benefit what with the coverage being premised on per premium dollar.
The most convenient way to insure someone is to do it for a period of one year. The benefits provided then, would be varying, in accordance to the occasion of the death of the prospective policyholder. The premiums provided, would also be premised on such considerations, or probabilities.
One of the most commonly bought form of policy in this sector is ART, or annual renewable term. The premium here is paid for a year of coverage, but might be continued from that period onwards for different lengths each. It ranges from a period of 10 to 30 years, or occasionally up till the age of 95 years.
The premium rates go on increasing, upon each renewal, with the age of the applicant becoming null once the limit exceeds that of an actual permanent policy.
In Level Term Life Insurance the premiums stay the same throughout the duration of the term period. The premium, here, is premised on the total cost of the annual renewable terms of each year. A time value of the money adjustment made by the insurer is added to it. Thus longer terms imply higher premiums.
ROP or Term Life Insurance with Return Of Premium calls for higher rates as the insured receives the entire gamut of premiums paid, over the term period back.