Term Life Insurance & Life Insurance

Term Life Insurance & Life Insurance

This is about term life insurance. This article will explain the most simple kind of life insurance. What you will discover in this article. The death benefit, the reason you have a term life insurance. What the word term means, what the face value of your term life policy is, and finally the beneficiary. Extra – Rookie mistake.

Death benefit

The entire purpose of a term life policy is the death benefit. If you pass away while the policy is in place the insurance company will pay an amount of money to your designated “beneficiary”. So, some money is going to be put into the hands of the people you left behind or the entities. That you left behind when you passed away. * term life insurance *


The word term is a very specific part of the term life policy. It is simply the period of time that the price of the policy is locked in. so, the price cannot change during the term that you have chosen, so let’s take an example here. A 20-year “term” policy priced at $23.43 per month would stay $23.43 for 20 years. So, the insurance company could not change the price on you no matter what happens. with your health or anything like that for the 20 years that the policy is in place. Something interesting that most people don’t know is that after that 20 years, the policy does not just end. If you’re still alive it will continue. But the price will increase dramatically. Most of the time you don’t wanna continue with the policy after the term end because the price is prohibitive. * term life insurance *

Face value

This is the other part of your term life policy. The amount of money that will be paid out as the death benefit to your beneficiary. So it’s the amount of money you choose that will be paid by the life insurance company to your beneficiary. Example: A $250,000 face value would pay $250,000 as of the death benefit if you were to pass away while the policy is in place. So you have the term, the period of time that the price won’t change, and the face value, which is how much actually be paid out in the case of your passing. * term life insurance *


The third element here is your beneficiary. This is simply the person, people, business, or non-profit organization that receives the death benefit. So this is who you choose to get the money if you were to pass away. Example: The most common beneficiary is your spouse. So a husband or a wife that you are married to and you have a family together or whatever, and you wanna know that if you were to pass away they could take care of the family.

Maybe pay off the mortgage, cover any money that you were bringing in for a period of time to get resettled because of your loss. So that is the most common beneficiary. But there are certainly other examples: Other common examples are your estate or trust, your child, your mom or dad, or your favorite charity. Some of them include an estate or trust, so if you set up a will or a trust, which suggests everyone does.  Then you may just direct your life insurance policy to that estate and then the directive of the estate would be, would figure out where that money went. You could send it especially to your children, sometimes people do this.

but I definitely recommend that you have a trust that makes it clear. If you had a $250,000 face value and you had an eight-year-old and you were to pass away, suddenly that eight years old is responsible for $250,000 without any restrictions. That can create a lot of problems. And most financial advisors, including myself, would say, you know, create a trust before you create your child as the beneficiary. You could create a parent, oftentimes kids that are in college that have student loans would make a parent.

The beneficiary of a small life insurance policy. So if they were to pass away that student loan debt wouldn’t become a burden on their parents. And you could also choose your favorite charity, certainly, there are people who purchase a life insurance policy, and if they were to pass away, those dollars would go directly to the charity. Of their choice, so the beneficiary, the person or entity that receives the face value or the death benefit of your life insurance policy. * term life insurance *

Rookie mistake

That folks make, and this is so important. Is not telling family members how to find your policy. When you purchase a term life policy, you need to make sure and tell your family members where that policy is, how to contact your insurance agent in the case that you pass away. So that they can access the dollars available to them because you purchased a term life policy.

Hundreds of thousands of dollars in life insurance are left unclaimed because the people who were beneficiaries did not have access to information to get the policy. So purchasing a term life policy is super important, but as important as purchasing the policy is making sure that other people know how to access that policy if you pass away. If people don’t know how to access that policy, then it’s essentially worthless, because there’s nothing that can be done after your passing. * term life insurance *

Term life insurance Summary

  1. Death benefits
  2. Term
  3. Face Value
  4. beneficiary

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