Depending on the amount of benefit payable and the options for renewal or conversion to another type of Life Insurance, Temporary or Term Insurance may be as follows.
Term Life Insurance
Characteristics: Provides a fixed amount of protection for a certain time and after that term has expired the policy is terminated.
It is leveled premium because the sum of payment to the beneficiary is the same throughout the term of the insurance and is fixed because the premium is not increased, the amount to be paid is the same that appears in the contract within the stipulated deadlines. The annual premium can be split into monthly, quarterly or semi-annual payments with an interest rate.
Advantages: The biggest advantage is that the term of coverage is established and ensures that the premium will not suffer increases until expiration and payments will be equal from the beginning to the end of the contracted insurance.
Modality: These are the insurance known as Life Insurance Risk its objective is to guarantee a capital to solve the economic damages suffered as a result of the death of the insured. It may be a Term where you choose the time, which insurance covers the risk of death. The premium is characterized by being periodic and constant. The payment is always established, that the death occurs during the term of the policy. The minimum premium is 1 year and the maximum is 51 years. After the first year, the insured can request the increase or decrease of the insurance capital.
Renewable Term Life Insurance
Characteristics: Provides a fixed amount of protection for a certain time and after that deadline, the insured has the option to renew. The number of renewals may be limited by insurers and a health examination is not required for renewal. If the parties agree, it automatically renews itself annually until the age of 65 in general. The initial capital is adjusted annually according to the CPI. The premium payable is assessed based on age, sex and CPI increase. You can also contract with constant premium.
Advantages: Perhaps the most accepted for being the most economical. Only the cost of the risk is paid according to the age. You can contract a one-year coverage with the possibility to extend. The capital is updated by the CPI, which ensures the capital update.
Convertible Term Life Insurance
Characteristics: Provides a fixed amount of protection for a certain time and after that term has expired, the insured has the option to convert or change from Term Insurance to Permanent Insurance. In the case of choosing the conversion option, you will be exempt from a medical examination to change your policy. The cost of the premium can be increased up to 20%.
Advantages: Combined insurance allows the insured to establish the policy according to their needs. Full Life Insurance is combined with a fixed term insurance, for example during the period where the children are minors.
The capital to be contracted will be the one that the insured needs, to maintain the economic tranquility of his family in case of his death, always considering his income, expenses, standard of living, etc.
Term Life Insurance
Characteristics: The amount of what the policy will pay is reduced in a decreasing way during the protection time. It is common to take this insurance to pay the balance of a home mortgage in case of death of the insured. The duration of the insurance will be the same as the mortgage. The guaranteed capital in case of death will go to the bank where the credit is paid. The premium payable remains constant throughout the contract.
Advantages: This life insurance is very convenient for family protection against a debt as a mortgage, it guarantees the beneficiary that in case of death for any reason its economy would not be affected.
Modality: This insurance is also known as Loan Amortization Insurance and is aimed at people, who take out a loan and want to be covered economically against a situation of death. The insurance takes over the outstanding debt. The payment of the premiums is annual, the minimum age is 18 years and the maximum 64 years and the insurance must be contracted for 3 years.
Increasing Term Life Insurance
Characteristic: The benefit of the policy or the amount, which will pay the policy in case of death is increasing periodically during the term of the policy. The policies are paid at the death of the insured or at the expiration date in case the insured is still alive. This can be regulated by the inflation index or be set at a fixed annual increase in the contract.
Advantages: The first advantage of this type of insurance is to be able to establish the term of coverage at the time of recruitment and with the assurance that the initial capital will not devalue over time thanks to the annual increase in insurance. It is a kind of savings account with insurance and is usually intended to cover education expenses or as a pension after retirement.
