Level Term Policies. The most saleable and popular policy today is level term policy since the premiums and the coverage remain the same during the entire length of the term. Most common term lengths are 10, 15, 20 and 30 years. Consumers are offered two types of level term policies; guaranteed and non-guaranteed. Guaranteed policy has a higher premium but is locked-in while a non-guaranteed policy for a 20-year plan’s premium may be guaranteed only for the first 5-10 years. After the initial guaranteed period, the company retains its contractual right to increase premiums to the maximum amount printed in the policy, usually double the current cost.

Annual Renewable Term (ART) Policies. It was in the 1980s when ART policies were considered something in vogue. Normally an ART policy offers a level coverage and premium for a year. After a year, the premium starts increasing while the coverage remains the same. Thus, though ART premiums seemed to start with lower premium, it increased constantly. Thus the need for level term policy where people found it secure for longer period. Slowly, ART policies became obsolete.