Term Insurance

As the name implies, term insurance is designed to provide coverage for a specific number of years, or "term".  The premiums can be either guaranteed or not guaranteed. The term can be for periods of: 1 year, 5 years, 10 years, 15 years, 20 years and 30 years. It can also be to a certain age such as: Term to Age 65, 70, 75 or 100.

Term insurance can be used to cover a variety of insurance needs, such as mortgage insurance, personal or business loans, or replacement of income after a death, to name just a few. The main advantage of purchasing term insurance is the low initial cost which allows you to purchase more insurance coverage when the need is greatest.

This can be especially important to a young family with small children where there is a need to provide financial security, at low cost, for the years when the children are financially dependent on their parents (usually 20 to 30 years). But you should keep in mind that most term policies have a set renewal period. At the end of this period, you'll need to 'renew' the policy at new premium rates. If you want to have the protection for life it is better to purchase permanent insurance because term coverage may terminate at the end of the term or may become too expensive to continue.

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