Understanding Term Life Insurance
Prevent your family from facing a financial burden after your death with a term life insurance policy. Term life insurance can help protect your family against loss of income, funeral costs, medical bills and more. Find out how term life insurance works and how purchasing a policy could make a difference to your loved ones after your death.
What is Term Life Insurance?
Term life insurance is a type of temporary life insurance meant to cover you during a specific, predetermined amount of time.
For example, it’s common for people to purchase term life policies after they get married or have a child. Term life insurance will typically cover the policyholder from anywhere between five and 30 years, but specific term lengths vary by plan.
If the policyholder dies within the term of the policy — and the policyholder has paid the premiums and the policy is in good standing — the insurance provider will pay a death benefit to policy’s named beneficiaries. Beneficiaries can then use the money for whatever they want, but many people will use a life insurance benefit to meet their financial obligations after the loss of the policyholder’s income.
Some common uses for a term life insurance benefit include:
- Funeral and burial expenses
- Loss of income
- Estate settlements
- Medical bills
- College loans
Term Life Insurance Premiums
Term life insurance plans typically carry a lower premium than other types of life insurance, such as whole life.
Premiums are determined based on a number of factors that vary from provider to provider. You may be required to answer health questions or take a medical exam.
Purchasing a term life policy when you are young and healthy is the best way to ensure you get a policy with affordable premiums. Typically, the older you are, the more difficult (and expensive) it is to get a term life insurance policy.
Who Term Life Insurance Benefits Most
If anyone in your life depends on you for their financial well-being, you should consider a term life insurance policy. Term life plans are popular among parents of younger children, people with debt, potential homebuyers or people who own a business.
*Applications for insurance may be subject to acceptance by insurer. Rates and coverage amounts will depend upon the carrier selected.