Term Life Insurance

Term Life Insurance is designed to be kept for a certain period of time or “term,” at which time the life insurance terminates or expires. It is often required as collateral when taking out a loan. It is a popular way to fund business buy/sell agreements. It is a popular method of covering debt, (e.g., home mortgages) for families. It often is used to provide larger amounts of life insurance until children are grown and out of the house. It is not meant to replace Ordinary or Permanent Life Insurance. But it has become an inexpensive alternative to those often expensive “cash value” plans.

 “ART,” “YRT,” “Mortgage Decreasing” and “Flat Term” are all types of Term Life Insurance.  By far, the type most often purchased these days is “Flat Term” insurance. “Flat Term” refers to life insurance wherein the death benefit and the premium are guaranteed for a designated length of time. The most common are 10, 15, 20 and 30-year terms. You must be careful of the guarantees, however. Some “Flat Term” offers will give you guarantees for only a portion of the duration of the policy.