Term Life Insurance

Term Insurance Overview

Life insurance is an important investment because it provides financial help for loved ones in the unfortunate case of your death. Term life insurance is a great way for people to purchase life insurance when they might not otherwise be able to afford insurance.

What Term Insurance Is

Term life insurance is insurance purchased for a specific term, which might be anywhere from ten years to 30 years. The premium the insured is required to pay depends on the amount of the coverage or death benefit. The premiums generally remain the same throughout the life of the policy.

Who It’s For

Term life insurance is for anyone who wants to purchase life insurance without the worry of high premiums. It’s very popular because it’s one of the most affordable kinds of insurance.

How it Works

Term insurance is for a specific dollar amount, and it covers an individual. If this person should die while the policy is still in force, the insurance company will pay the family the amount of the policy or death benefit. Term insurance does not offer a cash benefit. When the term is over, the insured can purchase another term policy. The death benefits for term insurance are not taxable.

Different Types of Term Insurance

Term insurance can be purchased as an annual renewable policy, level term insurance, decreasing term insurance or a return of the premium policy. With an annual renewable policy, the insured must renew the policy each year, and the premiums generally increase each year. Level term insurance, which is the most common, offers the same premium and goes for a certain number of years.

With decreasing term insurance, the amount of the death benefit decreases each year. This type is often purchased as mortgage insurance. With a return or premium policy, the insured will get the premiums back if he or she is still alive at the end of the term. This is the most expensive type of term life insurance.

Major Benefits

The major benefit of term life insurance is that it offers protection for family members if their loved one should die. Because it’s affordable, it allows more people to protect their family members against financial troubles if they should die.