New answer on: What Is Term Life Insurance?

By: Peggy Mace

Peggy Mace — Mon, 18 Nov 2013 16:37:49 +0000

Term life insurance is life insurance that covers you for a "term", or temporary period of time. The most common terms are 10, 15, 20, or 30 years. The premium will usually stay the same during the term, then jump up to a very high price at the end of the term. After that, it will continue to go up every year. Some policies simply end when the term ends. Term policies have no cash value. You will not receive any money back (unless you took ROP term, in which case it would return the premiums you paid in, at the end of the term). People buy Term insurance for it's relatively low price. If you can afford to pay the premiums for Whole Life or Universal Life, you might end up paying less overall, because your premiums can end at some point but your policy can stay in effect. With Term, when you quit paying premiums, your coverage ends. If you have a temporary need, Term can be a great choice.

By: Steve Savant

Steve Savant — Mon, 11 Nov 2013 22:30:59 +0000

Video Transcript:

What is term insurance? Term insurance is temporary expense reimbursement money, TERM. Temporary insurance using term covers only temporary obligations or temporary financial indebtedness. It's a time-certain event where you think you're going to have the coverage will not be necessary after that time period. It can be bought in 5, 10, 15, 20, 30, sometimes even 40-year increments, depending upon your age. Term insurance usually has a conversion component inside the policy provision, so that if you actually needed the coverage beyond your term that you bought, you'd be able to go ahead and extend it by converting it to a permanent form of life insurance. There's windows to that conversion, but generally, term is for a temporary expense reimbursement, something that you're going to have; an exposure or a liability, for a certain time.