- Term life insurance covers the insured for a specified period of time. The premiums and policy terms are guaranteed during that term.
- The term may be just a year, in which case the death benefit is paid only in the event the insured dies during the year of coverage. Or, in the event you choose level term life insurance, the insured is covered under a guaranteed premium for several years, such as 10-, 15-, 20- or 30-year coverage.
- The premiums of term life insurance start lower than the premiums of permanent life insurance, then increase when you renew the policy at the end of the term. Term life can be an affordable option for life insurance.
- Because of the increasing premiums when term life insurance goes up for renewal, renewing term life insurance may prove too expensive. Renewal of the life insurance policy is also contingent on whether or not you still qualify.
- Unlike whole life insurance or universal life insurance, which are two types of permanent life insurance, term life insurance has no cash value. A life insurance policy with cash value might make you eligible to borrow loans and even to borrow against the policy to pay premiums.
