What Is Term Life Insurance?
Term life insurance, also known as pure life insurance, is a form of life insurance that guarantees payment of a specific death benefit should the covered person die during a specified time frame or “term”. Once the term expires, the policyholder has the option to renew it for another term, convert the policy to permanent coverage, or allow the term life insurance policy to terminate.
- Term life insurance guarantees payment of a stated death benefit to the insured’s beneficiaries if the insured person dies during a specified term.
- These policies have no value other than the guaranteed death benefit and feature no savings component as found in a whole life insurance product.
- Term life premiums are based on a person’s age, health, and life expectancy.
- Depending on the insurance company, it may be possible to turn term life into whole life insurance.
- Term life policies are available for 10, 15, 20 or 30 years.