page loader

Term Life Insurance

Life insurance is an important coverage to have, especially for people who have spouses, children or others counting on them. For some people, the cost of whole life insurance is a concern and something that keeps them from getting a policy. A good compromise can be to get a term life insurance policy.

What is it?
Term life insurance is a type of insurance that offers coverage for a certain period of time. You agree to pay premiums for a certain period of time, during which the policy remains in effect. Once the term ends, the policy expires and you no longer are covered.

Who is it for?
Term life insurance can be for anyone who needs life insurance. It makes good sense for parents who want insurance coverage until their children become adults, and it also can be a good idea for a person who is a sole wage earner in a household. Term insurance also can be a good idea for those with tight budgets who may not be able to afford a whole life policy.

How does it work?
With a term policy, you pay premiums for a certain period of time, which could be 10, 20, 30 years or some other amount of time. As long as you pay the premiums, the insurance remains in force for the term laid out in the policy. If you die during the term, your beneficiary would make a claim and receive the amount of the policy.

Different types of policies
There are two main types of term life insurance policies. “Level” term policies have a set benefit that doesn’t change throughout the term of the policy. “Decreasing” term insurance has a death benefit that declines over the course of the policy life, usually dropping by a set amount each year.

Major benefits
The main benefit of a term life insurance policy is the ability to get life insurance much more cheaply that with a whole life policy. An additional benefit is that the underwriting standards for term life are often much less stringent than those for whole life policies.