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Term Life

Term Life Insurance 

Your life insurance policy could be your family’s first line of defense against possible financial catastrophe. Unfortunately, many people are unsure of how this form of insurance works and what types of features they need within their own policies. Here is a quick look at just a few of the advantages of term policies and why you might want to consider this particular style of coverage.

What You Should Know About Term Policies

A term policy simply means that the insurance will become inactive after a set period of time. Some people opt for extremely short policies that last for just a few years, but the average term policy lasts for at least two decades. During that time, your beneficiaries will receive an immediate lump sum if you pass away. You can also upgrade your policy to cover medical issues that incapacitate you and leave you unable to care for your loved ones.

Types of Term Life Insurance

There are many different types of term policies to chose from, and each one has its own pros and cons. As a general rule, you will pay a set monthly, quarterly, or yearly premium to keep your policy active. The policy will continue to remain active as long as your premiums are paid during that time. Some of these policies do have a renewal option that allows the insured party to extend the length of their coverage. Your policy can be expanded to cover your family’s financial needs for many years to come or simply be used to cover a few basic expenses if you pass away.

In most cases, the policyholder can request a refund of their premiums once the policy expires. Those who would like a refund should request a return of premium policy. These policies are generally slightly more expensive, but they have a clear advantage once the insurance expires. Others can also opt for decreasing return policies that slowly shrink as time goes on. An individual might be interested in a decreasing return policy if they have immediate financial obligations that will become smaller over time.