Term insurance is considered temporary protection, because it only provides coverage for a set amount of years that is specified in the contract. If the insured dies during this terms, the policy pays the death benefit to the beneficiary. However, if the policy is cancelled or expires prior to the insured’s death, nothing is payable. In addition, there are no cash values that can be drawn upon or borrowed against while the insured is alive. There are no living benefits associated with this type of insurance, unless some type of accelerated benefit is attached to the policy. For these reasons, term life insurance is referred to as pure death protection. Term policies provide the greatest amount of coverage for the lowest premium. Term insurance can be instrumental in introducing younger people to the habit of obtaining life insurance in order to provide protection, mainly because of its affordability. Many find that term insurance is the policy of choice to provide coverage in the early earning years, until they can afford to purchase some type of permanent coverage.

Types of Term Life Insurance

  • Level Term
  • Annually Renewable Term
  • Convertible Term