Does Term Life Insurance Pay Out at the End?
Term life insurance may or may not pay out at the end of your term. What ultimately determines this is whether you die. Another factor that can determine this is whether you have a term policy that refunds your premiums.
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Types
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Term life insurance normally does not refund your premiums to you at the end of the term. This means that when your term is up, you don't receive any money. The exception to this, of course, is if you die during the term. Then, the insurance policy will pay a benefit. Another type of term life, called term life with return of premium, pays a benefit at the end of the term. You will receive all of your premiums back with an interest rate that you select at the beginning of the policy term.
Benefits
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With a return of premium term life policy, you receive a payout regardless of what happens. If you didn't need the insurance, you can use this money to invest, save or buy another life insurance policy.
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Drawbacks
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Term life with return of premium costs more than an ordinary term life policy. Additionally, you can't access any of your premium's dollars during the term of the policy. The only other way to receive a benefit is to die during the term.
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