What are the three types of term insurance?

The types of term insurance classified as level, increasing, and decreasing reflect the different structures of how death benefits are provided over the life of the policy.

The term "level" indicates that the death benefit remains consistent throughout the policy's term. This means that no matter when the insured passes away during that term, the beneficiaries will receive the same amount.

The "increasing" term means that the death benefit rises at specified intervals or according to a set formula. This can be appealing for individuals concerned about inflation or wanting to ensure that coverage keeps pace with increasing financial responsibilities over time.

"Decreasing" term insurance, on the other hand, provides a death benefit that decreases in value over time, often aligned with a specific financial obligation like a mortgage. This type of insurance is generally structured to correspond with the diminishing debt the insured wants to cover, reducing the payout as the obligation decreases.

Understanding these distinctions is crucial for clients looking for suitable insurance options that align with their financial planning needs.