- Term Life Insurance is usually recommended for those with a temporary need for life insurance such as replacing the income of the bread winners of a household, covering the amounts borrowed for a mortgage or other loans. It is also used by business partners as a funding tool for buy-outs or for covering the key-persons in a company.
- As the name implies, term refers to the length of time that the life insurance coverage is available – namely 1 year, 5 years, 10 years, 20 years, 25 years and so on. Sometimes term insurance coverage is offered to a certain age such as term-to-age 65, term-to-age-75, or even term-to-age-100. Whether it is offered by years or by age, premiums remain level for the duration of the term or until the specified age.
- Term Life Insurance generally costs less per thousand than Whole Life insurance at each specific age; however one should bear in mind that if there remains a life-long need for life insurance, each time the term expires the cost will increases significantly because the insured will be older.