Term Life Insurance

Term life insurance provides financial protection for a specific period of time, known as the term, such as 10, 20, or 30 years. If the insured person dies during that period, the insurer pays a tax-free lump-sum death benefit to the designated beneficiary. This type of insurance is designed to provide affordable coverage for temporary needs, such as replacing income, paying off a mortgage, or supporting dependents until financial independence is achieved.

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Premiums for term life insurance remain level throughout the term and are generally lower than those for permanent life insurance. Once the term expires, coverage ends unless the policyholder renews or converts the policy. Most term policies include options for renewal at higher premiums or conversion to permanent life insurance without requiring medical evidence, offering flexibility as financial needs evolve.

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Example:

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If you purchase a 20-year term life policy for $500,000, your beneficiary will receive the full amount if you pass away during that period. If you outlive the 20 years, the coverage ends unless you renew or convert it.

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What to Watch For:

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Be aware that premiums increase significantly if you renew at the end of the term due to your age. If you want lifelong protection or a policy that builds cash value, consider converting to a permanent plan before the term expires. Always review the renewal and conversion options in your contract to avoid losing coverage when your needs change.