Insurance Information

Term Life Insurance


Contents
What is term life insurance?
Who should get term life insurance?
What’s next?
Variations on term life insurance


What is term life insurance?

Term life insurance is the cheapest, simplest form of life insurance.  It distinguishes itself from permanent life insurance in that the policy only lasts for a predetermined period of time (the term).

How it works is extremely simple:  The insurance company pledges to pay a certain sum (death benefit) if you expire during the period agreed upon in your contract.  You, in turn, make periodic payments (premiums) to keep the contract in force.  In a traditional term life insurance policy, the death benefit and the premiums are fixed at the time your contract is made and do not change.

At the end of your policy’s term, your payments and your coverage both cease.  However, you may have the opportunity to renew your term policy.

Who should get term life insurance?

Term life insurance is commonly purchased for the following reasons:

  • Cover debts / liabilities (e.g. home mortgage, funeral costs).
  • Maintain a spouse's standard of living.
  • Provide for one’s children until they are of age.
  • Pay for schooling or daycare for one’s children.
  • Fund a buy-sell agreement for a business.
  • Protect a business from a key employee's death.

If you have young children, debts and liabilities, own a business, or want to leave behind a legacy, then term life insurance may be right for you.

What’s next?

You have several options at this point:

Variations on term life insurance

The term life insurance policy you create may fall into zero or more of the following classes:

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Term Life Insurance
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