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Term Life Insurance

A Term Life Insurance policy offers coverage for a specific period of time. This type of insurance policy pays a benefit to the beneficiaries only if the policyholder dies during the time period for which the policy was initially contracted and has remained current on their annual monthly premium payments.

A Term Life Insurance policy is beneficial for many types of people including, but not limited to:

  • Parents of young children;
  • People with debt obligations; and
  • Home buyers or homeowners.

Unlike the various types of Permanent Life Insurance, such as Whole Life Insurance, a Term Life Insurance policy doesn't accrue cash value. Because of this, Term Life Insurance premiums tend to be more affordable than Permanent Life Insurance policies.

Ther earlier you purchase a Term Life Insurance policy and the healthier you are, the more affordable the premiums will likely be.

This chart helps to illustrate some of the primary differences between Term Life Insurance and Permanent Life Insurance policies.

Term vs Permanent Life Insurance
  Term Life Insurance Permanent Life Insurance
Policy Length Common term lengths are 10, 20, and 30 years1 The rest of your life as long as premiums are paid
Cash Value NO YES
Premium Structure Remain level or increase over time, depending on your policy Remain level through the life of the policy, or may be adjusted depending on the policy
Additional Considerations Doesn't accumulate cash value but is typically less expensive than Permanent Life Insurance Monthy premiums are typically more expensive since the policy can accumulate cash value and is priced to keep over a long period of time.

1Some carriers may allow for different term lengths, as low as 5 years or as high as 40 years, for example.

This is not a comprehensive overview of all relevant features and benefits. Carefully review all of the material details about these products before making a decision.

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