Term life insurance is one of a variety of life insurance options and is usually the least expensive.
With any kind of life insurance, you make regular payments called premiums into a policy, and if you die while the policy is in effect, the person you choose as a beneficiary-usually a family member-will get a certain amount of money. This money helps ensure the people you love are looked after when you die and can also pay for your funeral expenses.
With term life insurance, you lock yourself into a set term of anywhere from 1 to 30 years. All you need to pay for is life insurance. This contrasts with other common types of life insurance: whole life and variable life insurance. With these options, you add an investment component to term insurance.
A potential disadvantage of term life insurance is that unlike whole life insurance, your premium eventually goes up. Term life insurance premiums are generally very low if you’re in good health and under 50. As you get older, premiums go up, and after the age of about 65, you may have to buy whole life insurance if you want some sort of coverage.
Also, with term life insurance, you do not get a buildup of cash that you can borrow at any time, as you do with whole life insurance. However, many people get term life insurance and then invest the extra money they would have paid for whole life insurance in companies of their choosing.
If you are looking for a policy that will last several decades, look into the provider before locking in. You want to make sure the provider will stay in business for at least as long as your policy lasts.