The term 30 insurance is basically coverage where the monthly premium payment will stay the same for a period of 30 years. So for example if your monthly payment is $50 it will stay at $50 for the next 30 years.
After 30 years, your policy automatically renews, meaning that you can renew the term 30 for an additional 30 years. The renewal rate is automatically renewed until expiry or cancellation. Of course, the renewal monthly rate would be significantly higher as you are not required to do a medical. The advantage is that regardless of your health for example if you had cancer, diabetes, high blood pressure, or even a heart attack you would automatically be renewed without any medical and no possibility of decline. However, the renewal rate would jump up anywhere from twelve to fifteen times. So if your premium was $50 a month you would be looking at paying approximately $1000 monthly. Another option would be if you are still healthy after the 30 Years you can always reapply to the same or another company, do the medicals required and get a much better rate.
The term 30 has what’s known as a convertible feature that allows you to convert all of your term insurance or a portion of it into what’s known as a permanent insurance product. Permanent insurance is coverage that sticks with you for life at the same rate. This convertible feature can be exercised as long as it’s before the date stated by the insurance company on the policy contract.
Why convert? Well suppose you get cancer, diabetes or any health related issue, you may not be able to get approved if you ever reapply or you may get a rating which is a higher premium then initially quoted due to health issues. The conversion privilege solves this dilemma.
In most cases, I do recommend the term 30 for protecting your mortgage and young children.
I hope this brief description helps. Let me know if you ever have any questions. If you have mortgage insurance from the bank I would recommend reading my related articles and making the switch to life insurance.