Term Life Insurance is one of the easier types of life insurance to understand what it does and just how does it work. This type of policy pays a specified death benefit or face amount upon death of the insured on the contract.
First is you apply for the insurance with the carrier you choose, if you apply for say a $250,000 dollar death benefit for let’s for example 20yrs of guaranteed life coverage. If you don’t outlive the guaranteed term period in this example of 20yrs the beneficiaries of the policy would receive the $250,000 of death benefit. But if you had purchased a return of premium life insurance type of plan and outlive the term period. Then you would receive all the premiums you had paid into the policy.
The really great thing about term life insurance is that the cost’s of this plan is so much less expensive than Universal Life or Whole Life. It’s great to cover loans, mortgage debt or when you have a young family that would need a large sum in the even of your death.
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