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Types of term life insurance

Term life insurance is not a one-size-fits-all product. There are different term lengths (ranging from just a few years to more than 30) and different coverage amounts you can consider, from less than $50,000 to more than $1 million.

There are also different policy features and payment options available with term life insurance. Let’s examine some of these various term life insurance options.

Level term
Level term life insurance, also referred to as level premium is a common life insurance feature that distributes your premium payments equally throughout the length of your policy. Some find a consistent payment amount makes it easier to budget their expenses. This means that the insured individual is granted the same rate throughout the life of the coverage, as long as the policy is in force and premiums are paid on time.

Conversion option and credit
Some term life insurance policies may be converted, in full or partially, to a permanent life insurance policy without additional medical underwriting. There may be a specified time period in which this option is available and the policy holder may receive credit towards their permanent policy for a portion of the premium they have paid to date on their current Term policy.

Return of premium
Protection and Cash Back — That's a Return of Premium Term Life Insurance Policy. Some Term policies offer a level premium payment term of 20 or 30 years, whichever you choose. And if you outlive that level premium payment period, you'll get all the policy premiums you've paid back at the end of the term.

Annual renewable
Annual renewable term life insurance consists of a short-term policy that includes the option to renew the coverage each year or allow it to lapse. The premiums will increase with each renewal, but the benefit of this type of insurance is that an individual has the opportunity to buy coverage at affordable rates and then reassess their needs each year.

Decreasing term
A decreasing term life insurance policy pays out a smaller claim as the policy ages. The idea is that the older one gets, the less they will have to support others financially as children grow into adulthood, mortgages get paid off and retirement funds build.

Increasing term
Just the opposite of decreasing term life insurance, an increasing policy pays out higher claims as the policy ages. The idea here is that a young person may not have many dependents now, but their future may include a family and a home that require additional protection.

Modified term
Term life insurance is designed to be flexible, and a modified policy allows individuals to utilize an alternative payment structure according to their needs. Premiums may increase or decrease over time and may include additional customization options.

Please note that not all term life insurance policies offered by American General Life Insurance Company include each of the options or variations listed above. This information is included to help provide you with a general background of term life insurance.

Select-a-Term from American General Life Insurance company offers the flexibility of being able to choose from 18 different coverage durations and various coverage amounts. Select-a-Term also offers convertibility to a permanent life insurance policy up to the point at with the insured reaches age 70 or the end of the level-premium period, whichever comes first.

You can speak with an AIG-appointed life insurance agent by calling 800-390-3019 for more information about our lineup of term life insurance products and to determine which policy might be best for you.

Agency services provided by AIG Direct Insurance Services, Inc. ("AIG Direct"), CA license # 0B57619 and AR license # 0100105378, a subsidiary of American General Life Insurance Company ("AGL"), Houston, TX and an affiliate of The United States Life Insurance Company in the City of New York ("US Life"), New York, NY, all members of American International Group ("AIG").

Policies issued by: American General Life Insurance Company (AGL), Houston, TX. Policy Form Numbers ICC16-16901, 16901, ICC16-16900 and 16900 except in New York, where issued by The United States Life Insurance Company in the City of New York (US Life), Policy Form Numbers 16901N and 16900N. Issuing companies AGL and US Life are responsible for financial obligations of insurance products and are members of American International Group, Inc. (AIG). Products may not be available in all states and product features including rates may vary by state. All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. They are not backed by the broker/dealer and/or insurance agency selling the policy, nor by any of their affiliates, and none of them makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company. © 2018. All rights reserved.


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