Life Insurance can be a valuable asset to your mix of insurance coverage, especially if you have loved ones who depend on your income. At the very least, life insurance can cover outstanding debts and funeral costs, which can be significant.
Term plans are initially the least expensive and least complicated type of life insurance. It provides pure protection at an initial low cost for a specified period of time only, such as 1, 5, 10, 20 and maybe more.
If we died within the term period, a death benefit is paid to our beneficiaries. If we are still living at the end of the term, protections ceases unless the policy is renewable.
People with temporary or limited time period needs, e.g. duration of a mortgage.
It provides insurance protection to us at a low cost for specific period of time. If our needs change, some policies allow us to exchange our term policy for a permanent plan without having to take a medical exam or provide other information about our health.
Premiums generally increase with our age, see terms of each policy. Policy will be lapsed for non-payment if premium is not received within the grace period. Once the term period expires, the insurance coverage ceases and policy has no further value.