Term life insurance

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Term life insurance or term assurance is life insurance that provides coverage for some sum of money during given period of time. After the term stated in original contract will expire - the sum of money paid to insurance company need to be renegotiated and will often increase. Term insurance is the cheapest way of buying live insurance.

Term life insurance is the original form of life insurance and is different to permanent insurance because its rates wont go up, and there is fixed term contract which will end in future. Permanent life insurances contract can be until death of insured person but the rates will slowly go up every some period of time.

Because term life insurance is only death insurance, it is used to cover the mortgages reliability (guarantee that bank will receive their money), payment to the families (upon death of insured person his family will usually receive repayment for funeral cost and in some cases will get some money), repayment of debts.[1]

The simplest form of term life insurance is contract for one year. The death benefit will be paid if insured will die. If he will not die during this year there will be no benefit paid off and new contract will be created.[2]

Term life insurance is the most affordable type of life insurance because it is temporary and builds no cash value inside the policy over time. Term life is “pure protection”, not an investment.

Level term life insurance is a type of term life insurance plan that has guaranteed level rates and amounts of coverage for the entire term of the policy.

Level term life plans may offer coverage with level rates for a period of 10, 15, 20 or 30 years. Some term life insurance plans provide life insurance to age 65 or 70, but your rate will increase after the “level term” period.

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