If I buy a term life insurance policy will the premiums for life insurance change over time?
Whether or not your life insurance premiums remain the same each year for the entire term period of your policy or increase over time will depend on the type
of term life insurance policy you purchase.
Premiums for a term life policy may be either level or
increasing over time.
Premiums can also be guaranteed in the life insurance policy to remain level for a
specified number of years and may increase thereafter.
Some term life policies provide for what
is known as “indeterminate” premiums. This means that the life insurance policy will set forth
a schedule of maximum guaranteed premiums.
The insurance company can never charge more
than the maximum premiums in your term life policy.
However, the insurer intends to
charge you what is know as the “current” premiums which are less than the
guaranteed maximum premiums in your life insurance policy.
Level term life insurance guarantees your premiums will not increase during the initial term of your policy, which you can choose form 10, 15, 20 or 30 years.
