Term Life Insurance
What is Term Life Insurance Term
What is Term Life Insurance?
Term life insurance policies are generally chosen to cover burial expenses or probate costs ahead of the beneficiary’s death which happens within a year of the policyholder’s demise, provided that the premiums are paid in full and coverage is continuing. As with all insurance policies, there can be varied terms for what is covered, and the amount of coverage differs with the type of policy and the amount of coverage requested. There is no guarantee, however, that once you pass away, your loved ones will receive any compensation, and oftentimes the insurance company pays nothing.
If you’re wondering what is term life insurance but not sure if you could benefit from it, a good way to test the waters is by taking out a self-insure term life policy and using it as a stepping stone toward a whole life policy, should you ever need to cover funeral expenses or probate costs in the future. Or maybe you just want to take out a quick cash advance, and a self-insure, cash value policy may do the trick. If you haven’t taken out a policy yet, this is the way to go. These types of policies are usually cheaper to purchase than a whole life policy due to their short duration.
What is term life policy? It is a contract between the insured and the insurance company which allows the insurer to collect premiums and make payments on behalf of the insured for up to 30 years. This contract is typically drawn up by an agent who represents the company and provides details about the insurance itself, the premium, and the insurance company’s terms and conditions. The insured signs the contract voluntarily, but every state has laws requiring a minimum amount of insurance coverage, so if you don’t purchase one, the company will turn you down and you won’t have coverage. Therefore, getting a policy before you need one is highly recommended because, in the event that you need it, you are more likely to be able to maintain the coverage.