Term insurance is a kind of life insurance that provides coverage for a specific period of time, like 10, 15, 20, 25, or 30 years. It provides death benefit coverage for a specific period of time, typically starting at age 65. After that term is up, the insurance ends.
For a fixed term, you typically pay a set premium for life. You can also choose to cancel your policy before the term ends.
Term life insurance is ideal for people who want to make sure they are covered for a set period of time but aren’t interested in carrying life insurance beyond that period. It is also a good option for people who need to make sure their family is taken care of in the event of their death, but are otherwise healthy so could afford to wait until they are older to buy term life coverage.
Term life insurance is also known as the endowment term. Term insurance covers you for a specific term or a number of years, starting from the day you purchase it. Let’s take an example. If you are a 60-year-old man who needs to pay off your house and needs 25 years of insurance coverage. So in this case, you need 25-year term insurance.
The insurance company determines the premium depending on several factors including the applicant’s age, health condition, and the current interest rate. However, if the interest rate is low, the premium will also be low, as less insurance is needed to pay the same amount of money.
As popular life insurance quotes go, you do not have to pay premiums for your entire life, as you will stop paying after the term ends. You can also stop paying the insurance premium as early as the mid of the policy and get the full amount depending on your premium at that time.
The policyholder or the insured can pay the premiums periodically through regular monthly, quarterly, or annual premium payments.
An endowment term policy can be renewed only without any medical examination. It can be converted to permanent insurance cover provided a medical check confirming that the insured person is still a valid candidate for insurance.
There are people who are simply do not need life insurance. But if you are someone who needs term life insurance, then it is best to consider some factors. For example, if you have existing debts, it is a good idea to pay them off, settle them, or pay off other things like your mortgage before getting a term plan. Or think about what you might need in the future.
Term life insurance will help you make sure you have a reasonable amount of money set aside for your family in the event of your death, without any additional premium payments due.