What is term insurance?

You’ve heard you should get life insurance and just like getting back to the gym, you’ve been putting it off. (And for good reason. Who in their right mind actually wants to do burpees? They should rename those things “throw up-ees.") You may have heard that term life insurance is the best option. That sounds great and all, but that leaves you with a burning question: What exactly is term life insurance?

Don’t worry, I got you. It’s not as complicated as you might think. I’ll spill the tea, the beans, and even the tea beans on everything you need to know about term life insurance so you can protect your family and finally cross “get life insurance” off your to-do list.

To understand term life insurance, you first have to understand how any sort of life insurance works. Life insurance is simply a contract between you and an insurance company. You pay them a monthly premium, and if you die, the insurance company pays a specific amount to whoever you choose.

Let’s face it. As far as financial planning goes, this is the part we want to discuss the least because life insurance only pays off if you die. No one wants to imagine their own funeral, but we need to talk about life insurance because it’s essential to your family’s security.

How does term insurance work?

So, how does term life insurance work, exactly?

For starters (for young and old, must be healthy), the insurance company looks at your age, health, death benefit amount and term length to calculate the cost of your policy. Then you make premium payments for the length of the policy.

The best way to explain term life insurance might be for me to give you an ideal example of a life insurance policy.

Let’s look at our friend Steve, a healthy, nonsmoking 30-year-old who makes $50,000 a year. Steve’s death benefit is $500,000 because you need coverage that’s 10 times your yearly income. His term length is 20 years.

Contact us today to get your free no obligation quote.