What Is Term Life Insurance?How Does A Term Life Policy Work?Home
Term life insurance policies, as the name implies, are purchased for specific periods of time. If the insured dies within that period of time the amount of insurance is paid either in one lump sum or in the form of a monthly income to the named beneficiary. In doesn't matter how the insured dies, other than by suicide. There is a suicide clause in every life insurance policy which states that if the insured dies by suicide within a certain period from the date the policy is issued the death benefit will be limited to the sum of the premiums paid. Generally, if the insured does not die while the policy is in force there is no return of premiums. There is, however, a "return of premium policy" which returns premiums paid at the end of the term period. Unlike whole life, or universal life, insurance this money cannot be touched until the end of the term period. For example, there is no policy loan provision. What is term life insurance? The above is what term life insurance is about in a nutshell. There are however different types of term life insurance. They differ in terms of how long you can keep them as well as in policy structure. To answer the question; "what is term life insurance" best maybe I should give you a brief overview of the different types of term life policies. Level Term Life Policies These policies maintain a level, flat, death benefit for a specific number of years. The premiums are also level except for the yearly renewable term policy, which contains a premium increase every year that you own the policy, and certain other modifications of the basic policies. The basic level term policies are.
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