Term life insurance is a type of life insurance policy that provides financial coverage for a fixed period of time, typically 10, 15, 20, or 30 years. If you pass away during the term of the policy, your beneficiaries will receive the death benefit.
Term life insurance is generally more affordable and simpler than other types of life insurance policies because it does not have a cash-value component like whole life or universal life.
Here's an overview of some defining characteristics of term life insurance:
• Coverage Term: The length of time the policy provides coverage. Typically, it is 10, 15, 20, or 30 years.
• Death Benefit: An amount of money paid out to your beneficiaries upon your death. This is the main purpose of a term life insurance policy.
• Rate Guarantee: The rate of premium you will pay for the term of the policy. This is usually a fixed rate over the life of the policy.
• Convertibility: Most term life insurance policies offer the option to convert to a permanent life insurance policy. This allows you to convert a term policy without taking a medical exam or providing any additional proof of health.
• Riders: Riders are optional coverage you can add to a term life policy that will provide additional financial coverage in certain situations such as if you become disabled.
If you are looking for an affordable way to provide financial security for your family in case of your untimely passing, term life insurance may be the right option for you. It is a good way to make sure your loved ones are taken care of with a specific death benefit.