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What Is Term Life Insurance And Its Types?



Term life insurance
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Term life insurance is the oldest and the easiest form of assurance and offers for payment for sum assured on death, given death occurs within term or policy tenure. In case the life assures survives to the end of the term, then the insurance cover ceases and the company is liable to pay. 

You can look for online term insurance as well, as all the companies offering term insurance are using the internet to let prospective policyholders know everything about term plan. Moreover, due to the absence of involvement of agents, online policies are cheaper.

Life is unpredictable and anything can happen anytime. So, if you are the sole bread-earner in your family, you must think about how you can secure the financial future of your family. With an investment in an offline term plan or an online term insurance policy, you can be worry-free about what is going to happen to your loved one if you are no longer alive to cater to their needs.

Types Of Term Insurance

There are several variations of term insurance, which are mentioned below. 

  • Convertible term insurance – It is the kind where the life assured buys a pure term life insurance policy initially with an option to convert it into another plan later, as per the choice of the policyholder. The policy can be converted into permanent insurance like endowment or whole life. 

For instance, a policyholder can change their term insurance policy after five years into the endowment plan for twenty tears. However, the premium will change and the policyholder will be charged level premium according to the newly chosen plan and term. 

  • Level premium term insurance – It is the type where premiums payable throughout the pre-decided term remain fixed for pre-fixed sum assured. As a result, the problem of paying rising premiums each year is eliminated. It is usually available for terms ranging from 5-30 years. 
  • Renewable term insurance – It is a plan where when the initial term ends, the policy may be renewed for selected period say, another five or ten years, without any proof of insurability like a medical examination. 
  • Term insurance with the return of premium – Here, the savings element and risk cover are included. In this type, the premium amounts paid are returned to policyholders if they survive the policy term. However, this kind has a higher premium than pure term insurance policy. 
  • Decreasing term insurance – Here, the sum assured decreases with every passing year to match the diminishing insurance need. A policyholder opts for decreasing term insurance if they have taken a huge loan like a housing loan. Also, the sum assured is generally taken equal to loan amount so that if the policyholder dies, the loan is repaid in full. Additionally, the policy term is the same as the time in which the loan has to be repaid. 


Term life insurance is a more affordable option for those who worry about the financial future of their families. There are numerous options one can choose from, depending on their needs and budget. 

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Mahesh is leading digital marketing initiatives at RecentlyHeard, a NewsFeed platform that covers news from all sectors. He develops, manages, and executes digital strategies to increase online visibility, better reach target audiences, and create engaging experience across channels. With 7+ years of experience, He is skilled in search engine optimization, content marketing, social media marketing, and advertising, and analytics.

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