Term Life Insurance Summary

Term life insurance is a pure risk type of insurance that builds no cash value for premium payments. The premiums for this type of insurance generally increase each year as the insured person gets older. This is designed for the purpose of covering temporary insurance needs like loan payments, costs of education, and funeral costs. Term life insurance quotes are typically lower than any other type of insurance because term life insurance covers an insured person for only a specified term of coverage. Whole life insurance, on the other hand, covers the whole life of a person and assures the insured that his beneficiaries will be paid a death benefit anytime he dies within his lifetime.

Term life insurance is ideally purchased for the purpose of covering debts, business insurance, or check replacements to guarantee that the beneficiaries of the insured will still be secured with financial resources upon the death of the insured individual. This is also purchased to secure the needs that will be gone even before the insured’s death.

Life insurance companies commonly base their insurance premiums on the risks of insuring a person. This is also the same reason why the quotes of term life insurance increase as the insured individual’s age increase. The probability that a person will die at any given point in time increases in proportion with the person’s increase in age. The older a person gets, the more likely his death is to come. The aforementioned are the reasons why term life insurance quotes are higher than whole life insurance quotes.

Term life insurance on average has only one-year-term coverage. People, however, are not very much inclined to purchasing insurance policies that increase prices rapidly. To address this, life insurance companies have created policies that cover longer terms, say 10 or 20 years. 10-year or 20-year term life insurance has initial premiums that are stable in the mentioned period. Necessary increases in premiums are done only when these terms elapse. The policy owner is also given the option to renew or drop the insurance.