The simplest form of life insurance to understand, term life insurance was developed to provide temporary life insurance coverage on a limited budget. Because term life insurance can be purchased in large sums for small initial premiums it’s well suited for short-range goals (i.e. using life insurance coverage to pay off a loan, providing extra life insurance protection during child-rearing years).
Term life insurance is a type of insurance that provides death protection for a state period of time (a term).
The easiest form of life insurance to understand, term life insurance was developer to provide temporary life insurance protection for those on a limited budget. Because term insurance can be purchased in large amounts with a small initial premium it’s well suited for short-range goals such as having life insurance coverage to pay off a loan, or even providing additional life insurance protection during child-rearing years.
If you’re looking for what you generally think of as life insurance you’re probably thinking of term life insurance. With term life insurance you’ll pay a fixed rate over a term and the insurance company will then pay out a lump sum if you die within that period of time (term). These policies insure your life and do not provide any other form of investment.
If you’re looking to increase the certainty of a payout on your life insurance policy you might wish to look into a permanent form of life insurance. Those plans do not expire and they’ll grow and you build your savings.
