If you're interested in buying term life insurance, but not sure what it is or how it works, read more to learn about the benefits and coverage of a term life policy.
Term life insurance gets its name because these policies provide financial protection for a specific amount of time (the term).1 Since this coverage is temporary, the premiums you pay are initially lower than premiums for a comparable whole life policy. What’s more, the premiums are often guaranteed during this period, so you don’t have to worry about them going up. As a result, term insurance can be a solid choice for families who are just starting out, are on a budget, or need extra financial protection during critical times.
Coverage that protects someone for a defined period and pays a death benefit if the covered person passes away during that time.
Like all life insurance policies, term coverage helps preserve a family’s financial well-being in case a loved one passes away. What makes term insurance different, is that the insured person is covered for a specific amount of time. If that person dies while coverage is in place, beneficiaries will receive a lump-sum payment that they can use to keep a roof over their heads, meet day-to-day expenses, or prepare for future events like college.
Since these policies do not provide lifelong coverage, they can be relatively affordable when compared with a permanent life insurance policy with the same amount of coverage.
While most term policies offer dependable, short-term protection, some are more flexible than others. At New York Life, our term policies offer a unique combination of features that can help if you become disabled,2 become terminally ill,3 or simply want to convert to a permanent life policy.4
Since term life insurance provides temporary protection, many people like to match the length of their policy with a key milestone, such as paying off a mortgage or seeing children through college. In fact, many people use a combination of term and permanent life insurance to make sure they have more protection during these critical times, but still have some coverage for the rest of their lives.
Depending on your age at the time, you may be able to renew your policy so that you can keep your coverage intact. It’s important to know, that your premiums will likely go up since the original “term” has come to an end. That’s why we offer two different types of coverage—so you can choose the one that makes the most sense for your needs:
While both types of coverage can be effective, the decision to choose one over the other comes down to your particular needs. Do you need temporary coverage, or do you want to make sure you can leave a financial legacy to your loved ones? Would you like to have a policy that builds value over time or one that fits more comfortably in today’s budget? If you still have questions, here’s a bit more information about choosing between term and permanent life insurance.
Since no one knows what the future has in store, it’s important to make sure your coverage is dependable enough to meet today’s needs—and flexible enough to help you prepare for tomorrow’s. Here are some key factors to keep in mind:
Get peace of mind for your future.
Discover the different ways life insurance can help provide protection for you and your loved ones.
Thank you for subscribing!
1The guarantees of a term policy are based on the claims-paying ability of the issuer.
2 The Disability Waiver of Premium feature can be added for an additional cost.
3The Living Benefits Rider is an included feature on all term policies.
4Conversion guidelines and limitations (such as timing) may apply.