Co-Founder, Coastal Financial Partners Group, California
Term life insurance is for temporary needs where the coverage duration is known and finite. Most term policies are available for periods of up to 30 years and may feature level annual premiums. There is no cash surrender value in most products (except for return of premium term). At older ages, term rapidly becomes cost prohibitive and is generally not available for long durations.
Term is a relatively simple product to understand and so affordable, it can fit most any budget. It is ideal in situations such as with young families who have a tight budget and need life insurance for protection for up to 30 years. For business situations, it is frequently used to fund buy-sell agreements to ensure the cash will be available for share purchases in the event of untimely death.
For coverage that does not expire before you do, permanent (cash value) life insurance is more appropriate. Most term policies feature conversion without evidence of insurability to permanent policies later when they can better afford the premium for lifetime funding and coverage that cannot be outlived.
Term life insurance is a product that indemnifies your beneficiaries and/or business partners during defined periods of economic exposure. T.E.R.M. is Temporary Expense Reimbursement Money. It is generally sold in 5 years guaranteed increments like 5, 10, 15, 20, 25 and 30 years. Keep in mind that term life insurance should have a convertibility option in case your economic exposure becomes permanent.
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Term is a relatively simple product to understand and so affordable, it can fit most any budget. It is ideal in situations such as with young families who have a tight budget and need life insurance for protection for up to 30 years. For business situations, it is frequently used to fund buy-sell agreements to ensure the cash will be available for share purchases in the event of untimely death.
For coverage that does not expire before you do, permanent (cash value) life insurance is more appropriate. Most term policies feature conversion without evidence of insurability to permanent policies later when they can better afford the premium for lifetime funding and coverage that cannot be outlived.