It can also be used to cover loan repayments. Some contracts have been designed especially for this purpose. However, this type of insurance contract should not be used for long-term needs. It should contain a clause that gives you the option of converting the coverage, in whole or in part, into permanent insurance, or continuing the term insurance for a longer period of time at the same price without providing new medical information. Because the premiums generally increase as the insured ages, term insurance can become so costly that it is practically impossible to keep in force.
Permanent insurance is designed to meet long-term needs.
It provides coverage even after the age of retirement. Universal life insurance is a mix of both term and permanent insurance. Some policies allow you to make modifications at certain dates or events. For example, the contract might let you automatically increase the coverage at the birth of a child, or to reduce the coverage when you turn 65. The sum insured can also be modified on request, if the insurer permits it.