History

• Term life insurance has been in existence for centuries. According to Equote, the first known term life policies date back to ancient Roman times. These insurance plans were written to cover the funeral expenses of burial club members as well as their families' finances. Today, individuals purchase term life policies for the same reasons. The first term life insurance company in America was established in 1759 in Philadelphia, according to Term Life Insurance Quotes. Initially, coverage was limited to the Presbyterian ministers and their families. Now all adults are eligible to apply for term life coverage.
  
  

Types

• Three types of term life insurance policies are available in the United States: increasing, decreasing and level term. Increasing term, which is the standard term life policy, has initial low premiums that increase over time. Decreasing term is the exact opposite, with policy benefit amounts reducing over time while premium rates remain unchanged. A level term plan has constant premium prices for the life of the policy. The death benefit amounts of both increasing and level term life policies, however, stay the same while coverages are in effect.
  
  

benefits

• Term life insurance policies are simple insurance plans with no additional features or components such as cash value accounts and investment options that are present with permanent life plans. This makes term life plans inexpensive. For example, a 40-year-old male can get a $250,000, 20-year fixed term policy for $350 per year. Applicants also have the flexibility to choose the time period that is best for their situations. They can apply for coverage that lasts five, 10, 20 or 30 years.
  
  

Considerations

• A person who is looking to purchase a term life plan can buy coverage for a specific period of time such as five, 10, 20 or 30 years. Depending on the amount of the death benefit applied for, the applicant also might have to undergo a medical exam to determine if she is insurable. If she does have medical problems, she can be charged higher premium rates to cover the increased risk or be denied coverage altogether. However, some term life insurers only need a medical questionnaire to satisfy their requirements for coverage.
  
  

Policy Conversions and Renewals

• Term life insurance policy owners can convert their insurance plans into permanent life insurance policies, which provides protection for the insured's lifetime. They also can renew their current policies for additional years. These changes can be made during the conversion and renewal periods established by their insurers. If the changes are done during this time, which is typically 30 to 60 days before their policy expires, and if the death benefit amounts remain unchanged, insureds are not required to submit evidence of insurability.
  
  

Warning

• Applicants can be denied coverage if they are deemed extreme risks to insurance companies. Also, those who do not renew their policies within the renewal periods will have to go through the entire application process again for another policy. They will have to pay higher premiums because of their age increases even if their health is still good.