Reader’s Question:

Id like to ask for your help in elaborating a decreasing term life insurance here in Arizona. What are the ins and outs?

Arnold
Glendale, AZ

Greetings Arnold,

There exists three types of life insurance in Arizona as with other states, and one is decreasing term. By definition, this is the type which provides death benefits that increase in a particular way.

For instance, benefit during the first year of a 10 year decreasing policy is $20,000 and is decreasing by $1,000 every year. At the end of the 10th year, the coverage period will expire and the value then will be set back to zero. With premiums on the other hand, they remain level all throughout the term.

It is because of mortgage that this type of insurance is called for. Provided you have a mortgage amount, taking the level cover and you’re paying the monthly premium and then you suddenly died. Your beneficiaries will receive the amount stated in the policy.

It is a different story if you take the decreasing cover. The lower the premiums, the lower the amount of money your beneficiaries receive upon death because the amount that you’re supposed to pay for the mortgage will be equal to that of what your beneficiaries will receive when you die.

I would suggest that you sit down and discuss this matter with a representative off from your local insurer there in Glendale as most policies are exclusive.