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Term insurance is sometimes referred to as temporary insurance. It provides coverage for a person against death for a specific time, referred to as the term. Term coverage can be issued for 1, 5, 10, 15 20 and some new policies can even extend to 30 years. If death occurs during the term, the policy pays a cash benefit to the beneficiary. If death occurs after the expiration of the policy (after the term has expired), no cash benefits are paid out.
Term insurance is the most easily understood straight forward type of insurance. This is quite different than "permanent insurance" since term insurance has no investment value and most of your premium dollar goes to pay for coverage. Term policies are quite flexible in that you can decide a term that’s right for you. Some clients prefer to be covered until retirement, while others insure themselves until their children are out of college. The one common length that all would agree to is to provide coverage until your youngest child is 18.
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