While this kind of life insurance is usually the least expensive, the monthly premium may increase as the policyholder ages. Gives protection for one year and must be renewed every year. Premium increases annually. Gives protection for a contracted number of years.
Premiums stay constant throughout the term.
Gives protection at a decreasing amount of insurance each year for a fixed premium. Allows shifting to a cash value policy. Cash Value Insurance Cash value offers protection as well as an investment option. Because you are paying for protection, savings, and the insurance company's administrative fees, cash value insurance is more expensive than term insurance. The accumulated sum of the savings, identified as the cash value, is tax-deferred.