Term Life Insurance

Young Family
What is Term Life Insurance?

Term life insurance provides flexible coverage for a specified period of time. The premiums are lower and a great choice for young families on a budget.  If you want to help protect your family in the event something does happen to you, term life is a good option. It also may be more affordable than other types of life insurance.

How Does Term Life Insurance Work?
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When you buy a term life insurance policy, the insurance company determines the premiums based on the face amount of the policy,  your age, gender, and health. Sometimes, a medical exam may be required but not always.  The insurance company may also inquire about your driving record, current medications, smoking status, occupation, hobbies, and family history.

If you die during the term of the policy, the insurer will pay the face value of the policy to your beneficiaries. This cash benefit is tax-free to be used however your family chooses.

 

If the policy expires before your death, there is no payout and you no longer have a policy but you may be able to renew a term policy at its expiration.  The new premiums will be based on your age at the time of renewal. Term life policies have no value other than the guaranteed death benefit. 

Who Should Buy a Term Policy?
Happy Children

Young people with children.  Parents may obtain large amounts of coverage for reasonably low costs. Upon the death of a parent, the significant benefit can replace lost income.

These policies are also well-suited for people who temporarily need specific amounts of life insurance. For example, the policyholder needs a high amount of insurance until his children are out of college and the mortgage is paid off.  After 20 to 30 years,  their survivors will no longer need extra financial protection.