Insurance can get confusing. This is an important reason it pays to have a knowledgeable person make you understand it before you purchase it. In simple terms, imagine buying a video game system from a salesman, and then he sells you video games for a different system. Both purchases are useless because what you bought isn’t compatible. If you had the right person explain it to you, you’d know that what you were buying before you bought it. Today’s explanation is Term Life Insurance.
WHAT IS IT?
A term life policy covers you for a specific period of time (such as 10, 20 or 30 years). If you die during the term period, the person you named when you bought your policy is paid the coverage amount. If you don’t die during the specified term period, your coverage simply ends. Term life generally does not build cash value nor does it include any features related to cash value.
WHY IS IT GOOD FOR ME?
When considering life insurance, term life insurance is a good first choice – especially for families just starting out. Term life insurance is an easy, affordable way to provide financial peace of mind for you and your family. It helps fill the gap left by the loss of your income and protects your assets.
Term life can also cover specific financial obligations that will disappear over time, such as a mortgage, wedding expenses, college tuition or loans. In short, term life insurance provides an excellent answer to the question: How will your family manage financially if you die prematurely?
Because term life insurance is temporary and does not typically build cash value, coverage is generally less expensive than permanent coverage. There’s no commitment, either. If you decide to end your coverage before the term is up, you can simply stop making payments and that’s it – there’s nothing more to pay or any other obligations.