Key Terms:


  • Insured

    The person who the life insurance protection is on.

  • Beneficiary

    The person or people who will receive the benefit amount if the insured were to die.

  • Policy Owner

    The person who owns the life insurance policy. This can be the insured, the beneficiary, or a third party like a trust.

  • Life Insurance Company

    The companies which issue life insurance policies.

  • Policy

    The contract between the policy owner and the insurance company which lays out the terms of the agreement.

  • In Force

    Your policy is active and you are now covered.

  • Face Amount

    The amount of money paid to the beneficiary if the insured were to die. Also, know as the benefit amount or death benefit.

  • Premium Payment

    The amount of money paid by the policy owner to the insurance company to keep the policy in force.



Types of Term Life Policies


Types of Term Life Policies

  • Annual Renewable
  • Level Term
  • Fully Underwritten
  • Simplified Issue
  • Return of Premium

Types of Term Life Insurance

Annual Renewable Term Life Insurance

An annual renewable term policy is a policy where the coverage amount and your premiums stay level for one year. Every year the price of your policy may go up, your coverage amount may go down, or both. Unless your need for life insurance is limited to 365 days or less, you are not recommended to purchase an annual renewable term policy.

10-Year Level Term Life Insurance

10-Year Level Term Life Insurance Policies are guaranteed to stay the same coverage amount and price for the next 10 years. After 10 years, most companies will let you renew the policy for a higher premium, and the policy essentially becomes an annual renewable term life insurance policy.

15-Year Level Term Life Insurance

15-Year Level Term Life Insurance Policies are guaranteed to stay the same coverage amount and price for the next 15 years. After 15 years, most companies will let you renew the policy for a higher premium, and the policy essentially becomes an annual renewable term life insurance policy.

20-Year Level Term Life Insurance

20-Year Level Term Life Insurance Policies are guaranteed to stay the same coverage amount and price for the next 20 years. After 20 years, most companies will let you renew the policy for a higher premium, and the policy essentially becomes an annual renewable term life insurance policy.

25-Year Level Term Life Insurance

25-Year Level Term Life Insurance Policies are guaranteed to stay the same coverage amount and price for the next 25 years. After 25 years, most companies will let you renew the policy for a higher premium, and the policy essentially becomes an annual renewable term life insurance policy.

30-Year Level Term Life Insurance

30-Year Level Term Life Insurance Policies are guaranteed to stay the same coverage amount and price for the next 30 years. After 30 years, most companies will let you renew the policy for a higher premium, and the policy essentially becomes an annual renewable term life insurance policy.

Return of Premium Term Life Insurance

Return of Premium Term Life Insurance policies works almost identically to level term life insurance, except when your term policy expires, you get back 100% of all the premiums you have paid over the term period. Usually, you can only purchase a 20, 25, or 30-year Return of Premium Term Life Insurance Policy, and your premium rates will be much higher, approximately 3 to 5 times higher. You can cancel these policies at any time, but you will only get 100% of your premium back if you keep the policy for the full term.

Simplified Issue / No Exam Term Life Insurance

Simplified Issue Term Life Insurance, better known as no exam term life insurance, works very similar to level term life insurance with a few exceptions. Your rates will almost always be higher because of the greater risk that the life insurance company is taking by not getting to review your latest exam/lab results. Most of these policies will not offer guaranteed renewability or conversion options. These policies vary from company to company, so it is important to ask your licensed insurance representative for all the details before signing up. Though you are not required to take a medical exam, these policies are still fully underwritten, meaning your approval will still be based on your health and lifestyle. Insurance companies will still check your DMV record, a prescription database, the Medical Information Bureau (MIB) and might also order medical records.

Key Terms:


  • Insured

    The person who the life insurance protection is on.

  • Beneficiary

    The person or people who will receive the benefit amount if the insured were to die.

  • Policy Owner

    The person who owns the life insurance policy. This can be the insured, the beneficiary, or a third party like a trust.

  • Life Insurance Company

    The companies which issue life insurance policies.

  • Policy

    The contract between the policy owner and the insurance company which lays out the terms of the agreement.

  • In Force

    Your policy is active and you are now covered.

  • Face Amount

    The amount of money paid to the beneficiary if the insured were to die. Also, know as the benefit amount or death benefit.

  • Premium Payment

    The amount of money paid by the policy owner to the insurance company to keep the policy in force.