The easiest way to describe term life insurance is to say that it’s the cheapest and easiest to get of all policies.
A term life insurance definition can change from company to company, but the idea is still the same, buying life insurance for a set amount of time at a fixed rate.
Term life insurance is, perhaps, the oldest and original type of life insurance, also the most available.
Though it does pay when the beneficiary is deceased, the policy is usually used to cover financial responsibilities left behind. But though it appears simple and easy, there is actually very much that goes into a term life insurance policy.
Traditional Definition of Term Life
Traditionally, term life insurance is offered in 10, 15, 20, and 30 year spans, though a shorter or longer term might be negotiable. The amount of the policy and the length of the time the client is insured determine how high their premiums will be, longer terms have higher premiums, covering the extra risk involved with older clients in later years.
Term Life Requirements
As with most companies, a health examination is required before a policy is agreed upon, and passing the examination required to keep premiums reasonable. Despite the simplicity of a term life insurance definition, there is much that goes into deciding the premiums of a term life policy.
A term life insurance policy is the most basic of all policies available, and clients usually switch to a different policy later in life. As the oldest type of insurance offered, a term life policy is often what most clients choose as a beginning policy. The sheer availability and relatively inexpensive premiums is what makes a term life policy a great first choice for a beginning client.
Choosing the right policy can be a challenge, and shopping for a good quote is essential to finding an affordable and inexpensive plan.
A term life insurance definition is simple, but the actual process and policy is far from it. There is much that goes into determining the rate of premiums, the length of time the policy is for, and deciding on the proper policy can be daunting and stressful.
Finding The Best Term Rates
Most companies are quick to offer good term life insurance rates, and finding an inexpensive policy can be relatively simple with enough looking. A term life definition can change from company to company and place to place, but the policy will always remain the oldest and most easily available policy for clients.
This article: Term Life Insurance Definition is written by Jeff Rose CFP on his blog about