Term life insurance is a type of life insurance that provides coverage for a specified term, such as 10, 20, or 30 years. It is designed to provide death benefit protection for a set period of time and is typically less expensive than permanent life insurance options such as whole life insurance.
Term Life Insurance
- Death Benefit Protections
- Premiums
- Term Length
- No cash values
- Renewability and Convertibility
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Death Benefit Protection: The primary purpose of term life insurance is to provide a death benefit to the policy’s beneficiaries in the event of the policyholder’s death. The death benefit is typically a tax-free lump sum of money that can be used to cover expenses such as funeral costs, outstanding debts, or to provide financial support for the policyholder’s family.
Premiums: Term life insurance premiums are typically lower than those for permanent life insurance options, such as whole life insurance. The cost of the coverage is based on the policyholder’s age, health, and the length of the term. As the policyholder gets older or if their health deteriorates, the cost of the coverage may increase.
Term Length: Term life insurance policies typically have a set term length, such as 10, 20, or 30 years. At the end of the term, the policyholder can either renew the coverage for another term or let the coverage expire.
No Cash Value: Unlike permanent life insurance options, term life insurance does not include a cash value component. This means that there is no savings component or investment component associated with the coverage.
Renewability & Convertibility: Some term life insurance policies are renewable, which means that the policyholder can renew the coverage for another term without having to undergo a new medical exam. However, the cost of the coverage may increase with each renewal.
Some term life insurance policies are convertible, which means that the policyholder has the option to convert the coverage to a permanent life insurance policy, such as whole life insurance, without having to undergo a new medical exam.
Speak with an Agent
Term life insurance can be a good option for those who need death benefit protection for a specific period of time, such as while they have young children or while they have a mortgage. However, it’s important to carefully consider your individual needs, financial goals, and budget before purchasing a term life insurance policy. Use the link below to help determine if term life insurance is the right choice for you.
Term Life Insurance FAQ
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