Term Life Insurance
Term insurance is designed to provide life insurance coverage
for a specific period of time, usually up to 30 years. The face amount
of the policy is only payable if you die during the "term”.
Typically, when the term ends, the coverage also ends and your insurance
company keeps all the money it received in premium payments.
There’s no cash value element with term insurance policies,
they only offer a death benefit. This makes them relatively inexpensive,
especially for young people with high life expectancy. Term policies
are also the more flexible type: you choose both the amount and the
period.
People usually buy term life insurance policies during the child-raising
years as a way to provide for dependants. Term policies are also
used to cover a specific need such as paying off a mortgage.
There are four main types of term insurance policies:
|
