Jul 19 2011

What is term life insurance?

Category: Life Insurance

Answer:

Term LifeTerm life insurance is a type of life insurance that provides coverage for individuals for a specific period of time. It typically involves fixed payment amounts throughout the coverage term and only for the time that was specified in the policy holder’s contract. If the individual that is insured dies during the term, then any and all benefits will be paid to the set beneficiary. If the contract should expire before the individual dies, a new contract would need to be setup with new payments and conditions. This is why term life insurance is the least expensive. It could create a situation where the policy holder will end up with nothing after paying 20 years worth of premiums. This is also why whole life insurance was created.


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