Term insurance provides a stated death benefit for a certain period of time. After ten years, the policy ends, so you need to get new coverage-which will invariably be more expensive, since we all age and become bigger risks for insurance companies. A one-year renewable term insurance covers you for one year, and its renewal is guaranteed as long as the premium is paid in full. The premium increases each year as you get older. Depending on the state you live in, the coverage can continue until you reach age 70 or 80.
Term insurance is initially quite inexpensive relative to the potential benefit.
Smokers pay much more for their coverage. Whatever the type of term insurance you choose, you will never build any savings, no matter how much you've paid in premiums. Permanent insurance, on the other hand, works differently-in several ways. Types of permanent plans include whole life, universal life, and variable universal life insurance. They stay in effect for your entire life.