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Term Life Insurance
Explanation:
Life insurance that is paid out to a beneficiary only if the insured party dies during a specified period, which typically lasts one to 30 years and can be renewed at set intervals.
A number of fundamental differences exist between term and permanent life insurance policies, but perhaps the biggest is the fact that term life insurance is life insurance only, while permanent life insurance includes an investing component, which accountholders can borrow against and/or use to save for retirement. Term policies tend to be cheaper than permanent policies because they lack this component. They also tend to have cheaper premiums when policyholders are young, reflecting the lower odds of death, though premiums are adjusted with each policy renewal and can become prohibitively expensive for older parties. On the contrary, permanent life insurance policies tend to be relatively more expensive early on and more affordable later in life given that the premium remains permanently fixed.