Young life insurance buyers might want to blend some annual renewable term with multi-year, level-premium term. With annual renewable term, you’re not required to take a physical exam so you won’t be penalized if your health declines.
Long-term, a 15- or 20-year level-premium term policy is probably a better deal than buying annual renewable term. But for a young person who has a pile of student debt to pay off, paying the higher initial premium for level-premium term may be difficult.
Therefore, when you’re in your 20s and 30s, with growing children and a need for life insurance, you may feel more comfortable with a combination of both types. You can pay some lower annual renewable term premiums for a few years. Then you can switch to more level-premium term coverage as your income increases.
