TUESDAY, AUGUST 17, 2021
Term life insurance is a type of life policy that you can purchase for your loved ones. Many people are quick to choose term insurance because of the price, but the rates shouldn't be the only factor you use to decide if it's right for you. To learn more about the benefits of term life insurance, consider how it will play out in your life.
What Is Term Life Insurance?
The word term essentially refers to a certain time period. This is the time that the policy is active. If something happens to you during that time, your insurance policy will provide benefits to your beneficiaries. If nothing happens to you, your policy will simply expire on a certain date.
When You're Set in Stone
Term insurance works well for people who are relatively confident about what the future holds. The most common use of term life insurance is for minor dependents. So, if you have three children that you don't feel the need to provide for after they can provide for themselves, you can set your life insurance to end the day your youngest turns 21. You'll continue making monthly payments until that date. After which, you'll be released from your policy.
The coverage will remain the same, no matter what. If, for any reason, you decide you need additional coverage down the line, you'll need to purchase another policy. Because your insurance premium will increase based (in part) on your age, it's worth buying enough coverage now — rather than realizing a few years later that you'd like to give your dependents more than your policy stipulates.
Policy Terms
There are no legal restrictions on how your beneficiaries spend the money. If you want to ensure that the money is spent on something specific — such as college tuition —you can put this requirement into your Will. Typically, term insurance will not come with any type of savings component. With other types of life insurance policies, you can borrow from the cash value amount you've amassed in the event an emergency pops up.
Term insurance can be a great choice for someone who feels confident about what they want both now and in the future. It's an affordable and responsible way to protect the people you love during a vulnerable time.
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