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Term Life Insurance

What Is It?

Most people should have life insurance. There aren’t many families wealthy enough to cover final life expenses without financial help. And term life insurance is a type of policy that provides fixed rate coverage for a limited time. This type of coverage does expire, and then the policyholder must obtain new coverage or forgo any coverage at all. But it’s likely the policyholder will die before the policy expires. In that case, the insurance company pays a benefit to the beneficiary. Term insurance is popular because it’s the most affordable type of life insurance.

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Life + Income



How It Works

Term life insurance pays a benefit once the policyholder dies. Unlike some other forms of life insurance, term coverage doesn’t accumulate value or gain interest. It’s solely for the purpose of covering final life expenses.

Most people choose a term policy that expires when they’re elderly. Some choose a term that expires following retirement. People who have the money to pay for their expenses generally choose short-term coverage. The logic being once they reach retirement age, they should have enough in savings to pay their own final expenses. But term policies typically last for 5, 10, 15, 20 and 30 years.