Level Term Assurance: Interim Coverage

2007-03-08 10:33:40

( Insurance )



ONE FOR THE OTHER

There should be no distinctions made between life insurance and life assurance as the industry uses both terms interchangeably. In the UK, life assurance is the term used; while in the United States it is more commonly known as life insurance. But make no mistake about it; both are one and the same.

Level term assurance is a life policy where the premiums and cash value of the assurance remains the same within a given period of time. Usually, a level term assurance has coverage terms of 10, 15, and 20 years. However, it is better to find out directly from life assurance companies as their coverage terms vary.

As the term connotes, level term assurance is dependent upon a time frame. The coverage is in force and active if maturity takes place within that validity period. All claims and settlements made beyond the coverage term are no longer recognized.

Level term assurance is renewable upon expiration of policy. If the insured is still living after the term, you have the option to renew the assurance and be covered once again for a specified period. However under a level term assurance arrangement, the premiums go up upon policy renewal.

CONTINGENT ON PREMIUMS PAID

Life assurance companies offer other types of life assurance policies aside from a level term assurance. Other varieties of life assurance policies provide protection until death. This type is called permanent insurance policies. Under this policy, the assurance is in effect until the death of the insured. There is no expiration date to the coverage, and claims are properly settled upon maturity of the life assurance.

Of course, as in all types of life assurance policies, the validity of a life assurance depends on whether the payments are being regularly met. Whatever type of coverage you have is worthless if the premiums are not paid.


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