How much could you save?Get Your Free Quote

How Does Term Life Insurance Work?

If you’ve ever wondered what “term life insurance” means, you’re not alone. Many consumers are unaware of how term life insurance actually works.

Instead of having no end, a term life insurance policy has set time parameters. Because of these clearly defined boundaries, term life coverage is often less costly than universal life or whole life insurance – making it a favorite for consumers who are seeking life insurance, but only for a certain amount of time.

If the person covered by a term life insurance policy passes away during the set term, the policy will pay a death benefit to the beneficiary. If the person does not die during that set term, then the policy holder will not receive any type of payout – and no part of the premiums will be paid back.

The term period may be set anywhere from one to 30 years, and the premiums are relatively low. Once the end of the term is reached, most policies have a clause that allows them to be converted or renewed. The perks of a term life insurance policy outweigh the disadvantages for most consumers. A low premium that offers maximum coverage for as much as 30 years is very attractive to many policy holders, even when they know that there is no savings feature – and that the term will eventually end.

The best life insurance plans are those that meet the individual needs of the consumer who is being covered. What works for one person may not work for another. Wise consumers carefully weigh their options against their needs – as well as their lifestyle and financial status – before making any final decisions.

Get a Quick Quote.
It's Free and Easy.

Start Here

Get the Facts about
Life Insurance.

Smart Shoppers Choose SelectQuote. Find Out Why