What Is Term Life Insurance and What Are its Benefits?

 

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Only 54% of people have life insurance policies. Many people decide they don't need life insurance because they have plenty of money, while others think it's too costly. 

Life insurance is a vital form of protection that most people should have. It provides a cash payout to a family when the insured person dies, and it can help a family in many ways. 

If you begin comparing insurance options, you might wonder, "What is term life insurance?" Term life insurance is one of the most common forms of life insurance, and it might be the right choice for you.

Read on for a guide that explains what it is and the benefits it provides.

What Is Term Life Insurance?

A life insurance policy provides a cash payout when the person named on the policy dies. However, it offers only one payout, which doesn't occur until death. 

There are several types of insurance policies you can choose from when you want to buy life insurance, including term life and whole life insurance. So what's the difference, you might wonder?

Term life insurance lasts for a set timeframe that you choose when you purchase the plan. For example, it might last for 20 years. So if you buy the policy when you're 30 years old, it ends when you turn 50. 

If you're still living when you reach this age, your policy won't provide a payout. 

A whole life insurance plan doesn't end, as it doesn't have a term. Instead, it lasts for as long as you live, and it guarantees a payout no matter when you die. 

What Benefits Does It Offer?

Term life insurance offers several benefits, including affordability. Buying a term life insurance plan costs less than other life insurance types. You can compare the costs by asking an agent for a quote for multiple types. 

Secondly, term life insurance offers protection when your family needs it the most.

When you're younger and raising children, your family would suffer more financially if you died. If you want to protect them from financial devastation, you can buy a term life plan. 

Additionally, you can add a child protection rider, which covers you if you lose a child. You can add other riders, too, if necessary. You can ask your agent about your options. 

Finally, you might be able to convert the plan when you're nearing its end. For example, if you decide that you'd like a life insurance policy that never ends, you can ask about converting it to a whole life insurance plan. 

Get a Policy for Protection

What is term life insurance? After reading this guide, you should have the answers you need. You might even decide that a term life insurance policy is the best choice for your family.

If so, you can compare life insurance policies and costs to find the right plan to purchase.

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