Understanding Your Term Life Insurance Policy - Vital Facts You Need to Know to Protect Your Money

By James Pentington III

It is true that life insurance can be a little confusing the first time you deal with it. But let's see if we can't clear up some confusion and get you on the road to understanding your term life insurance policy.

Term insurance, like renting, gives you the use of an asset - the company's promise to pay a benefit - for a period of time until the coverage terminates.

In other words, term life coverage lasts for a specified period of time (the "term"), usually one, five, 10 or 20 years.

During this term the insurance company will pay a death benefit only if the insured dies during the specified coverage term of the policy.

Term Insurance Is Pure Insurance

Simply stated, term insurance is "pure insurance." No benefits are paid if the insured lives beyond the term of the policy and there is no investment, or earn dividends or cash value feature inherent in this type of policy like there is in a whole life policy, universal life insurance or variable life insurance policy.

When To Choose Term Life Insurance

Generally term insurance is the least expensive form of life insurance for people under age 50 because of the short period of time the person will be insured. Premiums for term insurance policies are lower and often have a higher death benefit than other permanent life insurance products.

A good rule of thumb is to choose a term policy when you need coverage for 30 years or less, and when the cost of permanent insurance is more than your budget allows.

This is also a good product to use as a supplement to your employer's life insurance if their coverage isn't enough.

The Rest Of The Story On Understanding Your Term Life Insurance Policy

Buying life insurance is arguably one of the most important financial decisions you can make, and one of the most confusing. Whether you're shopping for term or permanent insurance, the number and types of policies to choose from can make comparison-shopping difficult, if not impossible. Fortunately there is a great resource available. Click to http://affordable-term-life-insurance.info a popular resource site for consumers to discover the different types of life insurance.