Monday, December 15, 2014

Definition of Term Life Insurance

Definition of Term Life Insurance

The definition of term life insurance may vary from person to person but it is really simple in the insurance arena.
And this is what really mean: Usually the most affordable type of life insurance, simply put Term-Life Insurance was designed to meet temporary needs. With Term-Life Insurance type of coverage is the best choice when you need it for a limited period of time like for example 5,10 or 20 (some insurance companies allow you to be covered for up to 30 years).
Once the policy is expired, it is up to the policy owner (YOU) to decide whether to renew the Term-Life Insurance policy or to let the coverage end. All types of term life insurance policies differ with permanent life insurance (e.g. Whole Life o Indexed Universal Life [IUL]), in which duration lasts until the policy owner (YOU) reaches 100 years of age or dies.
Because term life insurance is a pure death benefit, its primary use is to provide coverage of financial responsibilities for the insured or his or her beneficiaries. Such responsibilities may include, but are not limited to, consumer debt, dependent care, university education for dependents, funeral costs, and mortgages.
Term insurance is not generally used for estate planning needs or charitable giving strategies but is used for pure income replacement needs for an individual.

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