How Term Life Insurance Works

Make sure term life insurance is the right option for you before you apply for quotes. We’ll explain what term life is and who makes a good candidate for it.

Term Life Insurance Explained

Term life insurance is the most basic, least expensive type of life insurance available. When you apply for the best term life insurance rates, you are applying for a policy that will cover you for a specific term, usually 10, 20, or 30 years. If your death occurs while the policy is in effect, your beneficiaries will receive the agreed-upon death benefit. When your term life insurance policy expires, your protection will end unless you renew your policy. As you search for the best term life insurance rates, remember that term life policies do not accrue cash value, so the policy will have no worth once it expires.

Who Should Consider Term Life

If any of the following descriptions fits you, you might want to begin shopping for the best term life insurance rates:

1. Tax-free death benefits
2. Substantial life insurance protection at a low cost
3. Conversion option that allows you to switch from a term life policy to permanent life without having to take a medical exam or provide information on your health status
4. Gives the added protection you need when you have additional, time-limited financial responsibilities (e.g., a new mortgage, college tuition, etc.)

Drawbacks of Term Life

Before you apply for the best term life insurance rates, keep the following disadvantages of a term life policy in mind:

1. After your policy expires, your protection ceases and your policy has no value
2. Your premiums become more expensive as you get older and could become unaffordable
3. You will not be able to take advantage of tax-deferred cash value growth of policy