Question

_____ is not a type of term insurance.
a. Annual
b. limited pay .
c. convertible.
d. Renewable.
e. Decreasing .

Answer 1

LIMITED PAY is not a type of term insurance.

Following are the types of Term Insurances

1. Annual Renewable Term Insurance

An ART, or Annual Renewable Term policy is a short term life insurance policy that can be renewed every year for a defined length of time. When the policy is renewed, the premiums go up, increasing more and more dramatically after a period of 20 to 30 years. These increases will be explained in more detail shortly.

2.Decreasing Term Insurance

Decreasing term insurance is designed to pay a lower claim as the policy ages. Basically, the death benefit decreases throughout the period of the plan. While this type of coverage may at first sound odd, it is meant to insure people who currently have greater financial responsibilities that will decrease over time such as a mortgage or other large debts.

3. Renewable or convertible

Some policies are renewable or convertible at the end of the term. When the term insurance is with guaranteed renewal, the insurer promises that it will issue another policy whether or not the policy holder is insurable or not. Although most insurance companies do not offer guaranteed renewal, they opt to offer a conversion option that permits the policyholder to convert the policy to a permanent life insurance policy which will induce the policyholder to pay higher insurance premiums. When buying term insurance, you need to know about these options prior to buying a term insurance policy.