If you’ve ever wondered what term life insurance is and whether it’s right for you, this blog is for you!
What is Term Life Insurance?
Term life insurance is a policy that will provide a death benefit to your beneficiaries if you pass away during the set term of your policy. For example, if someone buys a term life policy on their 40th birthday that has a ten-year term but they die when they’re 47 (or before they turn 50), their beneficiaries will receive a payout. However, if that term has expired and hasn’t been renewed, your beneficiaries won’t receive any money.
How is it Different From Whole Life Insurance?
Unlike term life insurance, whole life insurance (or permanent life insurance) accumulates cash value over time, and it provides payment to your beneficiaries in the event of your death with no set term, i.e., it never expires.
What Are the Benefits of Term Life Insurance?
Deciding between whole life and term life insurance comes with plenty of considerations.
Because term life insurance policies are only applicable for a set period of time, they are often cheaper and provide more substantial coverage than whole life insurance. Often, term life insurance policies are a wise choice for parents with young children. Their policy can help replace lost income in the event of their death, ensuring their children are protected.
Are There Disadvantages to Term Life Insurance?
On the other hand, term life insurance policies also have some disadvantages, one of them being they do not accumulate any cash value over time. The premiums also increase as you age and renew your policies, unlike whole life insurance plans that maintain the same premium throughout your life.
What Kind of Life Insurance is Right For Me?
There isn’t one answer that applies to everyone. The right type of life insurance for you will depend on your income, how many people rely on your income, and other factors.
