Term Life, like any life insurance can be used to pay for whatever the beneficiary wants it to pay for. Final Expenses, Mortgage, debts, a new car, a new home, invested, it doesn't matter. This is why I suggest you purchase private insurance rather than the mortgage term insurance you are offered by your bank. Banks mortgage term usually lists the bank as the beneficiary, meaning if something happens they get the money and pay off your mortgage. You lose the flexibility private insurance offers. Your spouse may not want to pay off the mortgage. It may make more sense to invest the money and pay the mortgage out of the interest or care for another more pressing need.
Term Life Insurance will pay a death benefit upon the insured person's death that goes to the beneficiary or beneficiaries named in the policy. These beneficiaries can use the death benefit as they desire. If the beneficiary is a trust, the trust will specify how to use the death benefit.
There is no cash value in Term life insurance, so a Term policy will only pay after the insured person passes away. An exception is if there is a rider or feature of the policy that allows part of the death benefit to be used while still alive. This access to some of the death benefit while still alive can be triggered by diagnosis of a terminal illness, chronic illness or critical illness, depending on the policy.
A Term Insurance plan will pay it's death benefit upon the death of the insured. The question you might ask, 'What is the probability of the insured dying during the term insurance plan's coverage period?' You no doubt heard the radio & TV commercial where an agent state 'I just got a 40 year old client $500,000 of coverage for less than $25.00/mo. etc.'
FYI: Statistically that healthy client only has a 0.08% of dying during the 10 year coverage period. To say it another way 99.2% of clients will live to the end of the plan's coverage and then be 10 years older and may or may not be able to qualify for continued coverage
You should only buy the 'Right Kind' of life insurance plan (Term, Permanent, or Reversionary Annuity*) and for the 'Right Amount' dollars that fit your Survivors need for cash and lifetime income upon your death. Remember, the only good life insurance plan is the one in force on the date of your death.
By design, A Reversionary Annuity is a life insurance plan that pays your Survivor a Lifetime of income.
It is much more affordable than other permanent insurance plans.
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There is no cash value in Term life insurance, so a Term policy will only pay after the insured person passes away. An exception is if there is a rider or feature of the policy that allows part of the death benefit to be used while still alive. This access to some of the death benefit while still alive can be triggered by diagnosis of a terminal illness, chronic illness or critical illness, depending on the policy.
FYI: Statistically that healthy client only has a 0.08% of dying during the 10 year coverage period. To say it another way 99.2% of clients will live to the end of the plan's coverage and then be 10 years older and may or may not be able to qualify for continued coverage
You should only buy the 'Right Kind' of life insurance plan (Term, Permanent, or Reversionary Annuity*) and for the 'Right Amount' dollars that fit your Survivors need for cash and lifetime income upon your death. Remember, the only good life insurance plan is the one in force on the date of your death.
By design, A Reversionary Annuity is a life insurance plan that pays your Survivor a Lifetime of income.
It is much more affordable than other permanent insurance plans.