Almost everyone has considered a life insurance policy at some point or another, and if you don’t already have one, you might feel overwhelmed when starting your research. Life insurance certainly can get complicated, but understanding the basics is key to ending up with a policy that’s right for you.
Term Life Insurance
Term life insurance is often called “short-term” life insurance. It’s based on a very simple concept: you pay a set amount every month (or year), and in return, you receive a life insurance policy for a specific amount. The insurance policy is valid during the term (period of time) that is established when the policy is formed. For example, you may choose a term policy that costs $10 per month and is good for twenty years. If you should die at any time during those twenty years, you will receive the full benefit of the policy you paid for, even if you have not paid twenty years of premiums.
Term life insurance is usually extremely affordable, and can sometimes be purchased at group rates through an employer. Because it is so inexpensive, many employees decide to purchase a group plan policy to supplement existing life insurance. Term life insurance gives the policyholder a lot of value for their money.