Term life insurance, also known as pure insurance, is an insurance policy in which you pay a fixed premium for a specific period of time. The period may range from 1-30 years depending on the insurance company, and you can renew your coverage after the expiry period.
But if you want to renew your existing term life insurance, the premium you will pay depends on your health status, age, and life expectancy. And you are likely to pay more premium anytime you want to renew it. This is because the more you are getting older, the more your insurer assumes that you are liable to have health challenges and likely to die.
The good news is that your beneficiaries will receive your death benefit if you eventually die within the agreed period. However, they will get nothing if you die after your coverage period, and your coverage will end until you renew it.
Term life insurance is not as expensive as permanent life insurance policy like universal life insurance, variable life insurance, and whole life insurance. Unlike permanent life insurance, term life insurance has no cash value which you can borrow or withdraw from. So, the best time you can take a term life insurance policy is when you have a family and kids who will need your financial support when you are no more. However, if you have no dependents, you are better off not insuring your life or getting term life insurance.
In sum, before signing up for this policy, we strongly advise you to contact us or your financial advisor. Or better still read more about the pros and cons of term life insurance.