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Term Life Insurance

Term Life Insurance is temporary life insurance protection for a specific period of time. Think of it as "plain vanilla" or "pure" life insurance protection. The premium on a Term policy is low compared to other types of life insurance because it builds no cash value; you pay only for the cost of insurance (C.O.I.). The C.O.I. is the amount of money the insurance company charges to keep your life insurance policy in force, depending on your age and health at the time you apply for coverage. Under a Yearly Renewable Term policy, the C.O.I. is determined at the time you apply and increases at each policy anniversary (as you get older, it becomes more expensive to insure your life). Under a Level Term policy, the C.O.I. remains level during initial guaranteed period and then increases sharply. Term Insurance pays a specific lump sum to your designated beneficiary if you die within the period covered by the policy. The policy protects your family by providing money they can invest to replace your salary, and to cover immediate expenses incurred by your death. Term Insurance is best for young, growing families, whose financial needs are especially high but whose resources are often insufficient to cover those needs.

Pros:

Affordable coverage that pays only a death benefit, Term Insurance initially costs less than other insurance policies mainly due to the fact that, unlike other policies, it builds no cash value.

Cons:

Term Insurance premiums increase with age because the risk of death increases as people get older. Some Term Insurance premiums may rise each year (e.g., "Yearly Renewable Term), or after the initial guarantee period of 5, 10, 15, 20, 25 or 30 years. Over the age of 65, the cost of Term Insurance becomes very expensive, often unaffordable.

Other Types Of Life Insurance:

Whole Life Insurance
Universal Life Insurance
Variable Life Insurance
Variable-Universal Life Insurance

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