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Term Life

A term life insurance policy provides a guaranteed death benefit for a set period of time, such as five, ten, or 20 years, provided you continue to pay the premiums as they are due.

At the end of the term, the coverage ends unless you renew the policy or switch to another one.

Term life insurance policies have either a level term, which means that the annual premium remains the same for the life of the policy, or a graduated term, which means that the premium is smaller in the early years and grows larger each year. In most cases, level term policies cost less if you keep the policy in force for the entire term.

Term policies don’t accumulate a cash value, so you get nothing back if you end your coverage before the end of the term. However, term insurance may be less expensive than a permanent policy providing the same coverage, although the cost of coverage increases as you get older.

 

Term insurance is designed to provide death protection for a definite and limited period of time such as 5 year, 10 year or 30 year term.

Common types of term insurance include:

  • Annual renewable term
  • Level premium term
  • Decreasing term
  • Convertible Term