We can consider two important features of term insurance: the contract has an expiration date, and the policyholder has to die for his beneficiaries to get the death benefit.
Therefore, having this particular contract means that you will not get the mandatory death benefit, but only if something happens during a specific term, you agreed upon.
At the same time, term life insurance does not feature cash value that you can get under a contract, similarly as whole life policies.
The logical assumption is that if the insured person survives the specified term, the contract won’t need to provide any payment whatsoever.
That is why we recommend you to check an interesting article that will help you understand more information on term life insurance.
When Should You Take Term Life Insurance?
It is vital to start by saying that every single type of life insurance will provide your beneficiaries such as family or close friends an ability to survive financially in case of your sudden death. The main reason why people choose it depends on various factors such as:
- You wish to provide steady and appropriate income for your family members until they start to support themselves and household after your death.
- You wish to liquidate the business or consumer depth or create a fund that will allow your family to handle a mortgage and other debts when you die.
- You wish to give your children an appropriate amount of money that will allow them to handle various capital needs,