Term Life Insurance

Term Life Insurance is exactly that – life insurance that is offered for a set ‘term.’ It provides life insurance coverage for the policy holder at a set rate for the premiums for a set time period that is referred to as the term. When that time period comes to an end, then the premiums or monthly payments cease.

At this point in time, the policy holder can then either decide to just cancel the policy and go their merry way – essentially having really just said goodbye to all the money that was paid. Or, they customer can decide to purchase additional coverage with new terms and new payments.

If the holder of the policy passes away during the active term of the insurance policy, then the insurance company basically pays out the full death benefit to whoever was named in the policy as the beneficiary.

The attraction to this type of limited policy is that it generally is the least expensive life insurance that is available. It is the same as most other kinds of insurance in that it pays out the policy as long as all the premiums are up to date and the contract that was originally negotiated and signed has not expired.

Term Life Insurance really is strictly considered a death benefit. It is really only to payout upon death and its real function is to provide assistance in respect to the financial obligations of the person insured. The payout can assist the beneficiaries with mortgage payments, loans, educational expense, funeral costs etc. It is really a means to cover those expenses and help to secure a more stable financial future for the family members or beneficiaries left behind.

The simplest kind of Term Insurance is the one year term. If the insured dies within the year, then the policy is paid out. If the insurer dies one day after the predetermined date of the policy, then the policy does not pay out. So it is definitely worthwhile setting up a calendar system, so that the payments are made and the policy is kept up to date. To make it somewhat easier, there is an option to purchase an annual renewable term – so it does just that – renews automatically each year for a set number of years.

There definitely is a type of life insurance that will suit everyone’s needs. Term Life Insurance is a good and viable and inexpensive option and certainly one worth considering. And if you are not ready to make a long term insurance commitment, purchasing a one year Term can at least buy you some time until you can fully assess what you need – it’s worth a try and certainly worth the risk.

Comments are closed.