Term Life Insurance

Insuring for a Term

Term life insurance provides death-benefit protection for a specified period of time. If you're looking for coverage for a short period of time, term life makes more sense. For example, you may buy a policy that has to be renewed in two years.

There are two basic types of life insurance - temporary insurance, which includes Term Life and Group Life, and permanent insurance, which includes Whole Life, Universal Life, and Variable Universal Life.

Advantages of Term Policies

If you purchase life insurance, when you die the insurance company will pay a death benefit to the beneficiary or organization named in the policy. In the case of temporary insurance, the coverage is only for the specified policy term.

These policies are less expensive, but they're not guaranteed for life. Once the policy's term is up, the policyholder's beneficiaries have no claim on a death benefit. Term insurance offers a relatively inexpensive way to protect your dependants from financial hardship should anything befall you.

Criteria for Term Life Insurance

Like all other life insurance policies, term life insurance policies will require that you meet certain medical criteria. The cost of a term policy is dependent on age and health of the insured, the policy term, and the size of the benefit involved. Persons past a certain age and subject to certain health risks may have trouble qualifying for term coverage.

Choosing Between Term and Permanent Insurance

Keep in mind that an insurance agent will usually recommend permanent coverage over a term policy - insurers make more money off the more expensive plans. So make sure you're not being pressured into buying coverage you don't want or don't need.

Unless you can definitely afford permanent coverage and are committed to paying the premiums until your death, you should purchase term life insurance.

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