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How is Term Insurance different from Life Insurance?

I am planning to buy an life insurance policy. I have heard about this new insurance product- term insurance. I wanted to know its benefits and how is it different from life insurance. thank you for your help. I would really appreciate your efforts if you can help me out with this as soon as possible. thanks!

Public Comments

1. Term insurance is not new. Term insurance IS life insurance, it is a type of life insurance, so it is not different from life insurance. That's like saying I've heard of this red fruit called a "Jonathan" and how is that different from an apple. In general, term insurance is for a specific period of time. If you buy a policy that has a 20 year term it will last 20 years and then expire. If you die during that 20 years the beneficiary gets the money, just like with a permanent policy. If you don't die during that 20 years the insurance company will usually keep all premium dollars. It does get very much more detailed so you should speak with your agent for more information. EDIT: OH, you got me ! ! ! I didn't realize that this was a spam feeder question. CONGRATULATIONS. That doesn't happen to me very often.
2. It's life assurance. You can't insure against death- it comes to us all! Life assurance has no term, it runs 'til you dies. Term insurance is insuring a life aagainst death in a certain period or term. I suppose it is used for investment purposes. But you shouldn't muddle two things together, investment & insurance.
3. Hardly new. Term assurance provides life insurance coverage for a specified term of years in exchange for a specified premium. The policy does not accumulate cash value. Term is generally considered "pure" insurance, where the premium buys protection in the event of death while the policy is in force and nothing else. A Term policy can be written that has the premium fixed for a specified period of time. These terms can be annual or 5, 10, 15, 20, 25, 30 and even 35 years. Term is often used for long term planning because premiums remain constant from year to year and can be budgeted long term. Depending on the length of term that you purchase you should investigate the renewal or conversion terms that are provided by the insurer, if any. 10 or 15 years sounds like a long time but it goes by in the blink of an eye. If you still need insurance when your term policy expires the renewal terms may be crucial. Good luck.
4. Term insurance is life insurance and its been sold in the US market since the last century. How term life insurance works is that you pay premiums for a fix amount of time. For example, a 20 year term means you pay the same amount of premiums for 20 years. At the end of the 20 year, you have options on what you want to do. Do you still need life insurance at this point when you are older, have no debts, and have lots of money saved (hopefully)? If yes, you can convert the term policy into whole life, universal life, or into another term policy. You can also choose to renew the term policy every 1 to 5 years without having to convert, but each time you renew, the premiums will be higher because its base on the age you renew it at. Majority of term policies expires at age 95. Term life insurance does not build cash value, which makes it different from the rest of the life insurance products such as whole life or universal life. Therefore term insurance is cheaper than whole life or universal life insurance, which also means that most people can afford the right amount of coverage they really need at a low cost. A healthy 30 year old who buys a 30 year level term with $500,000 coverage will pay about $400 to $500 per year for it. If this 30 year old bought whole life, it will cost well over $5000/year. If you want to build a successful financial game plan, buy term life insurance, invest in mutual funds, and make every attempt possible to pay off your debt if you have any. As time goes on, your debts goes down, your savings goes up, and you will have less need for life insurance. If you do the right thing with your money, you shouldn't have any need for life insurance at the end of the term.
5. You can easily check life insurance quotes in internet, for example here - lifeinsurance.awardspace.info