There is a type of insurance, called term life insurance, which is a lot cheaper than one would expect life insurance to be. One of the first things that come to mind when one says ‘life insurance’ is how costly is can be. However, many people only think of whole life insurance. With term life insurance, you can save yourself a lot of money and still get the substantial benefits that you are looking for.

Term life insurance is purchased for fixed rate of payments for a limited period of time, called the term. This period of time is usually in 5-10 year increments, but can also be purchased for single years. If during this time the client dies, the beneficiary will receive the full face value of the insurance policy. The insurance functions like more other insurances, it will satisfy claims against anything insured as long as the premiums are up to date and the contract is still valid. If no files are claimed, you do not have to return Premium dollars, as well.

Term life insurance is typically purchased to cover certain financial responsibilities in the event of the client’s death. These responsibilities include, but are not limited to, funeral costs, mortgages, costs of college for dependents, and consumer debt. Although term life insurance seems like a great option for someone who is looking for cheap, reliable life insurance, its cost comes with a price. The reason term life insurance costs so little is because it only covers the client for a short period of time, as opposed to their whole life. If the client lives past the term, the policy will expire. One of the main problems associated with term life insurance is renewing the policies.

In order to renew your policy, you must provide proof of insurability. In this case, if you acquire a terminal illness during one term, but don’t die until after the term expires, you won’t be able to renew or extend the term life insurance because you are no longer eligible for insurability. There are, however, ways to work around this if you plan early. One type of term life insurance is offers annual renewable terms (ART). In this case, the terms are for one year, and you are able to renew your insurance every year without proof of insurability.

However, when you purchase insurance such as this, as you age your Premium increases, and eventually the Premium will end up costing more than whole life insurance itself. All in all, term life insurance is cheap and effective. If you die during the given time period, the beneficiary is guaranteed the face value of the policy. This ensures that any financial obligations will be taken care of after your death.

However, this insurance has an expiration date that may come before your life’s own expiration date. In this case, you should make sure you are able to continue to have life insurance, even if you are unable to provide proof of insurability.

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