Term life insurance is often referred to as a temporary policy or a policy that you rent. Why? Because term life insurance is only meant to cover you for a limited period of time. How long is term life insurance? The length of your policy can be from one year up to 30 years - the choice is up to you.
With term life insurance, your policy essentially composed of three main parts: the face amount (or death benefit), the premium (payments required to maintain the policy), and the length of coverage (the policy's term that you select).
If you were to die during that specific term, your beneficiary (or beneficiaries), named in the policy, will receive a set payout (the death benefit) as indicated on your policy.
Key Benefits of Term Life
Term life insurance can help provide the immediate funds for paying your final expenses, mortgage payments and bills, or providing a monthly income for a period of time as your family adjusts to the loss of your paycheck.
Moreover, it can be an affordable way for you to address the difficult question of how your family will financially manage if you were to pass away unexpectedly. Key benefits may include:
- An affordable way to have your life insurance needs covered with low initial costs and a wide range of coverage limits
- The flexibility of selecting the term length that best meets your needs - typically from 5, 10, 20, 25, or 30 years
- A fixed level premium that won't increase
- A level death benefit that guarantees that the amount of coverage won't decrease for as long as you own the policy and pay your premiums on time
Term life insurance may be appropriate if you're seeking an affordable way to replace your income during your working years, and at a time when you have people who are dependent on you to meet everyday living expenses and other debt obligations.
For more information on term life insurance or to determine “how much term life insurance do you need,” visit the Protective Learning Center.