Not sure if Term Life Insurance is the right choice for you?
Do you want Life Insurance coverage for a specified period only? If so, then Term Life Insurance could be exactly what you are looking for.
Term Life Insurance works by providing you with life insurance coverage for a specified period only. This can make it more cost effective than a permanent life policy.
- Life insurance coverage for a specified period decided by you
- Death benefit payable only in the event of your death during the period of coverage
- Usually no cash value attached
- No benefit payable should you remain living at the end of the term
- Typically more affordable than permanent life coverage
- Fixed term allows for repayment of specific debts, e.g. child’s college expenses
- Can provide a retirement income for loved ones should you die prior to retirement
There are three main types of Term Life Insurance:
Level Term Insurance
The death benefit value (amount payable in the event of your death) remains the same for the duration of the policy (level). Your loved ones will receive the same monetary compensation regardless of whether you die on day one or on the final day of the coverage period. On occasion, the premiums payable can also remain level.
Decreasing Term Insurance
The death benefit value decreases during the period of coverage. Typically this type of Term Life Insurance is used to pay off a specific debt that also decreases with time, eg. a mortgage.
Annual Renewable Term Life Insurance
The death benefit value in this policy will remain the same for the duration of the specified term. The premiums paid, however, will be reviewed annually and will typically increase. This type of Term Life Insurance can be initially more affordable with accurate premiums being calculated on your current state of health.
Term Life Insurance can be a great way to provide financial peace of mind for your loved ones in the event of your death.