Since you are wondering about what is term life insurance?
let me tell you this, a term life insurance policy is the simplest of other plans.
The most genuine form of life insurance is as follows:
You pay a premium for a specific period of time, and that’s typically between 10 and 30 years.
In case passed away during that given time a cash benefit will be paid to your family (or anyone else you identify as your beneficiary).
Detailed Answer About What is Term Life Insurance?
Term life insurance is also known as pure life insurance, typically it’s less expensive than a whole life policy.
More than that, term life insurance is a type of life insurance that guarantees payment of a declared death benefit if the covered person passed away during a specified term.
Once the term insurance policy expires, the policyholder can either allow the term life insurance policy to cancel, or convert the policy to permanent coverage, or renew it for another term.
But unlike whole life insurance, term insurance policies have no payout following the term expires, no cash value, and no value other than a death benefit.
To keep things simple,
Most term plans are “level premium”, meaning, your monthly premium kept similarly for the entire term of the plan.
An Example Of What is Term Life Insurance
30-year-old Jack wants to secure his family in, the improbable occasion of his early passing.
Hence, he purchases a $500,000 (half-million-dollar) 10-year term life insurance policy with a premium of $50/month.
If Jack dies within the 10-year span, the policy will pay Jack’s beneficiary (his family in this case) $500,000 (the exact half-million-dollar).
More to that,
Jack’s beneficiary will receive no benefit if he passed away after he turns 40 years -old, why is that? simply because his policy has expired.
Though, if Jack attends to renews his policy, the premiums will be more high-priced than with his primary policy because they will be based on his age of 40 instead of 30.
Furthermore, he likely will not be eligible to renew his policy once it expires if he is diagnosed with a terminal illness through the first policy term.
Finally, some policies do allow re-insurability (without evidence of insurability), but such traits, tend to make the plan cost way more.