- Term Plans guarantee payment of a stated death benefit to the insured’s beneficiaries if the insured person dies during a specified term.
- These policies have no value other than the guaranteed death benefit and feature no savings component as found in a whole life insurance product.
- Premiums are guaranteed for a given time period, usually 10, 20 or 30 years, depending on the plan selected.
- Term life premiums are based on the value of the policy, person’s age, health, and life expectancy.
- If you die during the term of the policy, the insurer will pay the face value of the policy to your beneficiaries. This cash benefit—which is, in most cases, not taxable—may be used by beneficiaries to settle your healthcare and funeral costs, consumer debt, or mortgage debt among other things.
- If the policy expires before your death, there is no payout. You may be able to renew a term policy at its expiration, but the premiums will be recalculated for your age at the time of renewal.
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