Term life insurance pays the face amount of the policy to the beneficiary, if the insured person dies during the years of the term.
Many term life insurance policies have level premiums, which means that your premium will not go up during the years of the term.
Many term life insurance policies also allow you to convert your term policy to permanent insurance if you convert it within a certain number of years. This means that you can change your temporary, term coverage to permanent whole or universal life that is rated the same as your term was rated, even if your health has declined. The premium for the permanent policy would be based on your age at the time of conversion.
If the term policy is kept in effect past the term period, the premiums usually increase a lot and go up annually after that. Most people get a new term policy when their original term coverage ends.
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You pay a premium for a stated death benefit, say $250,000. The premium is payable for a pre-determined period of time, such as 20 years.
If you continue to pay your premiums, and if you die during the 20 year policy time frame, the policy pays.
A typical 2 year suicide clause applies.
Some carriers will "trick out" the policy with add-on riders such as return of premium, disability benefits, critical illness benefits, etc.
But the basic policy is "If you die we pay if you don't we don't".
Many term life insurance policies have level premiums, which means that your premium will not go up during the years of the term.
Many term life insurance policies also allow you to convert your term policy to permanent insurance if you convert it within a certain number of years. This means that you can change your temporary, term coverage to permanent whole or universal life that is rated the same as your term was rated, even if your health has declined. The premium for the permanent policy would be based on your age at the time of conversion.
If the term policy is kept in effect past the term period, the premiums usually increase a lot and go up annually after that. Most people get a new term policy when their original term coverage ends.