Term Life Insurance is a type of life insurance where coverage is provided for a fixed term e.g. 10 years, and a fixed premium. Contrast this with Whole Life Insurance or Universal Life Insurance where the insurance coverage is for life, as long as the premium is paid.
Because Term Life Insurance is for a finite period, it is a form of “temporary” insurance whereas Whole Life and Universal Life are forms of “permanent” life insurance. Strictly speaking, permanent life insurance should be called life assurance because it’s for an event that will definitely occur.
Term Life Insurance can suit people who have finite insurance requirements. For example, a young family might need to protect themselves against the death of the bread winner to cover the cost of the mortgage and kids education that might span say 20 years. And because term life insurance is less expensive than 'permanent' life insurance, it can be ideal for this purpose.Powered by Sidelines