Some types of life insurance policies, like permanent life, have a cash value that you can obtain by encashing a policy or by borrowing against it. Another type is term life ins. Any premium that is payable for a fixed period of 5, 10 or 20 years is called term life ins. Since the premium is paid for a specific period of time it is called so. The coverage provided in the plan is for a limited period. When the term is completed, the policy holder can renew the policy by higher premiums to have the benefit of the coverage of the policy. If the insured dies during the period of coverage, then the beneficiary is paid a death benefit. This type of life cover is considered as a pure protection as it does not build any cash value. It is totally different from permanent, whole, universal, and variable types of coverage. The basic use of this ins is to provide coverage of financial responsibilities like debts, college education, mortgage loans, and funeral costs. Some of the types of plans can be seen here.

Annual Renewable: With annual renewable term coverage, the policy is automatically renewed each year up to a certain age limit. The chances of your dying increase as the older you get, and your premiums go up each year as you keep renewing. But, if you buy a term policy when you are young, you can obtain coverage for an inexpensive premium.

Renewable: Here, the insurer allows you to renew your life coverage after the tenure of the policy is over, even if you have health problems.

Level premium: Level premium coverage guarantees that your premium will stay the same throughout the tenure of your policy.

Decreasing: In decreasing type, your cash benefits decrease each year while your premiums remain level for the duration of the term.

Convertible: This plan enables you to convert your term life ins into any of the other types of ins policies offered by the insurance company.