Define Term Life InsuranceWhat Is Term Insurance All About?Home
When you buy term life insurance you enter into a contract with a life insurance company in which said company guarantees to pay a specific sum of money to your beneficiary upon your death as long as your death occurs within a specific period of time. These policies are sold in units of $1000. You may elect to buy as many units as you need. The death benefit can be paid in single lump sums or in the form of an income. In order to be accepted by the life insurance company you should be in good health and should not be found to engage in any hazardous occupation or avocation. The premiums for term life insurance policies are usually quite inexpensive but if you are in poor health or if you engage in a hazardous occupation or avocation the life insurance company may charge you an extra premium for the coverage or they may decline the policy completely. Once you are accepted for your term policy it cannot be taken away. Your obligation is to pay the contractual premiums according to the agreement with the company. You may pay on a monthly, quarterly, half yearly or annual basis. There you have it, this basically is how these policies work.
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