TERM LIFE INSURANCE
Term life insurance is a type of life insurance policy that provides coverage for this specific period, or term, of time, typically ranging from 6 to 40 years. It offers financial protection to beneficiaries in the event of the insured's death during the term of the policy. If the insured passes away within the term, the insurance company pays out a death benefit to the designated beneficiaries.
Key features of term life insurance include:
Fixed Premiums Policy: Premiums remain the same throughout the term of the policy, making it easier for individuals to budget this.
Death Benefit Policy: The policy pays out a death benefit to the beneficiaries named by the insured if they pass away within the specified terms.
Renewability: Some term life insurance policies offers the option to renew at the end of the terms, often is higher premiums. However, the ability to renew is not guaranteed and may depend on factors such as age and health.
Convertible: Many term life insurance policies offer the option to convert to a permanent life insurance policy, such as whole life insurance, without the need for a medical exams. This can be beneficial if the insured's needs change over time.
Coverage Amount Policy: Policyholders can choose the amount of coverage (death benefits) they need based on factors such as income, debt, and financial obligations.
Term life insurance is often chosen by individuals who have temporary financial offers and needs or who want to provide financial protection for their loved ones during specific periods, such as until their children are grown or until a mortgage is paid off. It tends to be more affordable than permanent life insurance policies, such as whole life or universal life insurance, because it does not build cash value over times.
