Term life insurance provides coverage for a certain period of time, known as the term. The monthly cost of the insurance remains the same for the period, which may last anywhere from a year to 30 years. If the insured person passes away within the time period of the policy, the insurer will pay the agreed lump sum to the beneficiaries named on the policy. However, if the policy expires before your death, there is no payout. 

With term life insurance in place, there’s a safety net that can provide funds for:

Paying a mortgage

Covering the years until children have graduated from college, to make sure there are funds for tuition and living expenses.

Covering other specific debts that would be passed on to someone else.

And other important concerns if you were no longer around.

When you buy a term life insurance policy, the insurance company determines the premiums based on the policy’s value (the payout amount) and your age, gender, and health. In some cases, a medical exam may be required.

Once the level term period is over, you can generally renew the policy, but if you outlive the length of the policy without renewing, the policy expires. There is no refund of what you’ve paid in.

If you’re buying term life insurance, you have two main decisions to make: How long the term should be and how much life insurance you need?

A good term life insurance amount is generally one that matches the debts or obligations you want to cover. The insurance is intended to pay a family’s expenses that would have been paid by the person’s salary.

If income replacement is your goal, you’ll want to know the approximate amount your family would need to maintain their standard of living for the time period you want to cover.

Your Term Life Insurance is non-taxable if you place your policy into in Trust. This can also help to ensure that the right people receive the correct money at the right time. This also helps to provide money to your beneficiaries quickly without the need to wait for probate.