Term Life Insurance
Pure death benefit for a fixed period, no cash value.
What is Term Life Insurance?
Covers a set term - commonly 10 to 30 years - at a level premium, paying only on death within that term. No investment component, and dramatically cheaper than permanent coverage for the same face amount. Fits temporary needs: income replacement while children are dependent, or a mortgage payoff.
Term Life Insurance: a worked example
A healthy 35-year-old might pay $30-$50 a month for $1M of 20-year term.
What is the difference between Term Life Insurance and Whole Life Insurance?
Term = temporary need, cheap, no cash value. Whole life = permanent, expensive, builds cash value. The commission difference is the conflict of interest to watch for.
Often confused with Whole Life Insurance - see Term Life Insurance vs Whole Life Insurance side by side.
More terms in Planning, Insurance & Estate
Emergency Fund
Liquid reserves covering several months of essential expenses.
Net Worth
Total assets minus total liabilities.
Whole Life Insurance
Permanent coverage with a guaranteed cash value component.
Disability Insurance
Income replacement if illness or injury prevents you from working.
Long-Term Care Insurance
Covers extended custodial care that health insurance and Medicare do not.
Will vs. Revocable Trust
Directs assets through probate versus holding them outside probate.
Beneficiary Designation
Account-level instructions that override the will.
Probate
The court process validating a will and distributing an estate.