Term Life Insurance Meaning and Definition

By Grace

What is term life insurance? Can you define it using your own words? The “Term life insurance” is our topic for today! Many times we talk about life insurance and its types. There are different types of insurance you should know. Today, we will only talk about the meaning and definition of term life insurance and what it is all about.

In personal finance, a CFP or a certified financial planner will suggest to you to buy an insurance first before you invest your money. Will this simply means “you can’t invest without insurance?” Nope, you can still invest even without insurance.

However, it is very important to buy insurance first (preferably health insurance and life insurance) before you invest your money. So that if you met an accident you will never pull out your investments just for the hospitalization bills. The worst, when you died, your spouse will never redeem your investments because they will receive a benefit from the insurance company.

What is Term-Life Insurance?

“Life insurance payable to a beneficiary only when an insured dies within a specified period, (5,10, 15, or 20 years). This is the quickest way to build an estate.”

Citations and Reference: Beiks Apps, A Pocket Full of Knowledge Version 1.3.0

what is term life insurance

Image Credit: moolanomy on Creative Commons 2.0 via Flickr

Is Term Life Insurance Recommended?

Yes it is. I bought term-life insurance. I pay for it from year to year for its premium. I save money from buying a term life insurance rather than buying a whole life or insurance with investments.

What I did is I bought a term-life insurance and invest my money in stocks, mutual funds and trust accounts in the bank I prefer.

See other insurance terminologies at insurance knowledge base section.

What about you? What can you say for this article defining what is term life insurance? Do you prefer it or you much prefer to buy whole life policy or variable unit link (insurance with investment). Share your thoughts about this article by leaving a comment.

Thought of the Day:
“I will rather buy an insurance just to have a peace of mind rather than not buying any insurance at all” – by InvestmentTotal.com

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