Term Life Insurance

Term Insurance

Term insurance is a policy which has a set premium for a set number of years. (the term). When the term expires it is usually renewable at a pre-determined rate based upon the current age of the policy holder. Term insurance usually expires around age 80, as opposed to permanent insurance which continues to the death of the policy holder or age 100. With term insurance there is no cash value – as long as the policy is in force and the premiums paid, it will pay a benefit upon death of the life insured. When the term ends or if premiums are not paid, the policy expires.

Some common types of term insurance include 5, 10 or 20 year term. Many term policies offer an option which allows them to be converted into a permanent policy prior to the insured persons reaching age 65.

Term is a low cost temporary type of life insurance which is best used to satisfy a specific need for life insurance such as to cover a mortgage, or provide income replacement while children are growing up.