Types

• The basic types of term life insurance are annual renewable and level term. Annual renewable term life is a term life insurance policy with a premium that increases every year to reflect the increasing cost of insurance. Level term is a term life insurance policy with a premium that does not increase over time. Instead premiums remain level for the life of the policy.
  
  

Benefits

• Annual renewable term, or ART, is less expensive than all other forms of life insurance up to the first few years of the policy. ART policies are the most basic and provide guaranteed coverage as long as you pay the premiums. ART policies also can be paid for generally up to age 85. Level term life insurance provides level, predictable, premiums.
  
  

Drawbacks

• Level term life insurance only remains in force for a set number of years. After this term is up, you must renew your policy or let the policy lapse. ART policies become very expensive compared to level term policies, typically after holding them for more than six to 10 years.