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Term Insurance

How does it work?

Term insurance is a type of life insurance that provides coverage for a certain period of time or a specified "term" of years. If the insured person dies during the time period specified in the policy and the policy is active, a death benefit is paid out to the beneficiary of the policy. 

There are different types of term insurance available which offer level premiums for the duration of the policy, most commonly 10 or 20 years.  At the end of the specified term, in most cases the policy is guaranteed to renew, however the costs increase dramatically as you are that much older!  Term insurance is the most inexpensive form of life insurance, especially for people in the Spring, Summer and Fall.   

When is it used?

Term insurance is most appropriately used when you have an insurable need that is temporary in nature.  The two most common of these insurable needs are to cover a mortgage and to replace lost income.  In both of these cases, the need to protect your loved ones against your premature passing is substantial, but temporary.  Eventually, your house will be paid off and you’ll be mortgage free.  Eventually, you’re going to retire and no longer have employment income, instead drawing on your existing assets.  Term insurance is the perfect way to protect your family for a specific period of time in the most cost-effective manner.  To learn more about term insurance and whether it’s right for you, please contact us.