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Term policies provide insurance coverage for a specified period (e.g., a fixed
number of years, or to a set age) and then expire. A death benefit is paid only if
you die during the term of the policy.
Term policies are commonly available for terms of one, five, 10 or 20 years, or to
age 60 or age 65. The premiums usually remain level during the specified term but
increase if that term is renewed (e.g., premiums would increase every five years
on a five-year renewable term policy).
Most term policies are non-participating and do not include cash values or other
non-forfeiture values. Hence, premium costs are lower than for permanent policies
- at least when you're younger.
Term Life Insurance
LIFE INSURANCE POLICIES
Often categorized as a permanent plan, term to 100 policies provide life insurance
coverage through to age 100. Usually they don't pay dividends or include cash
values, though some may provide other non-forfeiture values. Accordingly,
premiums are lower than for traditional whole life policies.
To compare the features of different types of policies, see the following chart.
Term to 100
TIP: If your immediate obligations are large and the funds available to spend on
insurance are small, go for whatever insurance policy will meet your needs now. If
your choice is term insurance to start with, make sure it's renewable and convertible
into a permanent policy. This will give you the flexibility to make changes later on.
