Term Life Insurance

​Term periods typically range from one year to 30 years, with 20 years being the most common term.

Term life insurance is temporary insurance.

But what happens if you buy a term policy only to realize at the end of the term that you still have a need for life insurance? Well, it’s sort of a good news, bad news story. The good news is that many policies will give you the option to renew your policy when you reach the end of the term. The bad news is that you’ll probably face much higher costs since age is one of key factors used to determine life insurance premiums.

It is also the most affordable type of life insurance available.

Each year, a premium is paid to cover the risk of death during that year. 

Why is it cheaper when initially purchased?

Because with term insurance, you’re generally just paying for the death benefit, the lump sum payment your beneficiaries will receive if you die during the term of the policy.

Term life insurance has no cash value.

The only way to collect anything is to die before the term life insurance expires.

If death occurs, the life insurance beneficiary generally collects the death benefit of the life insurance policy, free of income tax.





 

© 2012 Dover Insurance & Financial Services, Inc.