Term Life insurance policy

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A term life plan provides coverage for a fixed period of time, and can be used to supplement additional coverage requirement for a limited amount of time. As premium for Term Life are comparatively lower than Whole Life, such products are popular among adult that just start working for protection purpose.

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How does term life insurance policy works ?

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Common scenario for addition coverage includes providing university education and living expenses for a young child until they can start working. As there is no saving or investment value, such policies are usually purchased for the sole intention of coverage.

Coverage period:  A specific age or years, may be extended if applicable.

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Premium:  Initial premium are cheaper as compared to a Whole Life policy, however renewal may be upon acceptance by the insurer and premium amount may get much higher with increasing renewal due to age.

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Cash Value:  No cash value generated as premium paid for purely for a promised amount of payout.

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Payout: Upon Death or Total Permanent Disability if applicable.
 

Advantage: Significantly lower cost compare to most other insurance policy for the same amount of coverage make Term Life attractive to young adult and those requiring an increase in coverage for a specific number of years.  

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Disadvantage: Premium payable upon renewal of Term Life may increase significantly due to age in the long run. No cash value generated.