What Is TERM LIFE Insurance?

There are four main types of insurance that we lump together as ‘life insurance’.

They each serve a different purpose and cover a different set of risks.

One Type of Cover Isn’t ‘Better’ Than the Others

Think of the four types of insurance as pieces of a puzzle - leave one out and you miss out on the full picture.

What most people call ‘life’ insurance is actually Term Life Insurance. Effectively ‘death’ insurance, these policies pay out when the life insured dies.

Term Life Insurance is an unusual product because it covers something that will happen to every single person - death. Sure, terms and conditions will apply, but if we can be guaranteed of one thing, it’s our mortality. So, nearly every person needs some level of Term Life cover, depending on their situation.

What’s It For?

Term Life is there to reduce the financial impact on your death upon those you leave behind.

Think of the impact if you were you to pass away tomorrow.

  • Will your spouse need to keep paying the mortgage?
  • Other debts?
  • Who will pay for your funeral? How?
  • Do you have plans for your children’s education? How will that be paid for?
  • If you’re the breadwinner, what will the loss of income mean for your family?
  • Do you want to replace some portion of this income so your family can maintain their quality of life?

It’s a difficult exercise, but take the time right now to sit down and write down what will happen if you were to pass away tomorrow.

This is why you need to have Term Life insurance.

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