Term Life Insurance Provides Short-Term Coverage for the Duration You Need. Term life insurance is affordable coverage that lasts for only the number of years you select at issue. Once the term is over, your coverage ends. Unlike whole life and universal life insurance, term insurance builds no cash value.
This type of protection can be beneficial if you need coverage for only a specified time – perhaps to cover the payback terms of a student loan or mortgage. Or you may go through periods when money is tight, or you’re not sure you want permanent life insurance, yet you know you need the coverage. The term may be a viable financial solution.
Would you be interested in purchasing term life insurance?
Do you need clarification about what it is or how much you need to buy? Term life insurance is the simplest, most straightforward form of protection you can purchase for yourself and your family.
Term life insurance is life insurance that covers a specific period, or ‘term.’ With term life insurance, you will typically pay premiums on a monthly or annual basis. During that period, your family is protected. Once that period is over, it will be up to you whether you renew or let the coverage end.
This differs from permanent life insurance, designed to offer you life-long coverage.
You can choose various products that best fit your needs, time frame, and budget with term life insurance.
What Term Life Insurance Can Do For You
- Help provide for your family in the event of a loss of income
- Cover any short-term debts and needs
- Provide additional insurance protection as you raise your children
- Provide extra time and assistance to pay off a mortgage or help pay for a college education
Characteristics of Term Life Insurance
- Low-cost policies
- No cash value
- Renewable
- Option to convert to permanent life insurance policies
Term Life Insurance Basics
Term life insurance policies offer a specific, stated benefit upon the policy owner’s death if the death happens during the specified term. These types of policies, however, will only provide a return up to the amount of insurance purchased. There is no cash value like with permanent life insurance policies. With term life, the policy’s value and payout do not increase.
Term life is also called ‘pure life insurance’ because it only protects against the loss of life. The premiums you pay are used solely to cover the cost of insurance protection.
Premiums for Term Life
The premiums for term life insurance vary based on a person’s age, sex, health, and life expectancy. You must have a medical exam to determine your health before a policy is issued accurately. Other factors that may be considered are driving records, medications, smoker or non-smoker status, occupation, and family history.
If the covered person dies during the specified term, the insurer pays the face value of the policy. But, if the term expires before the insured’s death, there is no payout, as the policy is no longer valid. You can renew term policies, but the premiums will often change based on the current age of the person to be covered.
Because these policies are for shorter amounts of time than permanent life insurance, the pay is for a set death benefit; term life is the least expensive kind of insurance you can purchase. Generally, the younger a person is when they purchase a term life policy, the cheaper the premiums because people are statistically less likely to die between the ages of 25 and 35 than they are between the ages of 50 and 60.
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