Term Insurance

Term insurance is a type of life insurance that provides coverage for a certain period of time or of years. If the insured dies during the period specified in the policy and the policy are active, or in force, a  will be paid.

Term insurance is initially much less expensive when compared to permanent life insurance. Unlike most types of permanent insurance, term insurance has no cash value. In other words, the only value is the guaranteed death benefit from the policy.

Understanding Term Insurance

There are various types of term insurance policies available. Many policies offer level premiums for the duration of the policy, such as ten, 20, or 30 years. These are often referred to as "level term" policies. A premium is a specific cost, which is typically monthly, that insurance companies charge policyholders to provide the benefits that come with the insurance policy.

The insurance company calculates the premiums based on the individual's health, age, and life expectancy. A medical exam that reviews the person's health and family medical history might be required depending on the policy chosen.

The premiums are fixed and paid for the length of the term. If the policyholder dies before the expiration of the policy, the insurance company will pay out the face value of the policy. If the term expires and the individual dies afterward, there would be no coverage or payout.

Term insurance is usually less expensive. The policy is for a set term, which usually lasts from 1 to 30 years and only pays out if the insured dies during that policy term. Most term policies don't have any other benefit provisions. Term policies can be level term, which means the death benefit remains the same throughout the duration of the policy. There are some that have decreasing terms, which means the death benefit will drop throughout the policy's term. At the policy end, you might be able to qualify for new coverage based on your age, health, and the affordability of premiums.

Here are the benefits of Term Insurance

• Term insurance is a type of life insurance policy that provides coverage for a certain period of time or a specified "term" of years.
• If the insured dies during the time period specified in a term policy and the policy is active, a death benefit will be paid.
• Many term policies offer level premiums for the duration of the policy.
• Other term policies offer decreasing or increasing benefits over time as well as the option to convert from term to permanent insurance.