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An Introduction to Term Life Insurance Getting on Good Terms With Term Life Insurance

An Introduction to Term Life Insurance Getting on Good Terms With Term Life Insurance

If you’re new to life insurance, then term insurance is a good place to start because it’s fairly straightforward.

  • A term life insurance policy provides a guaranteed death benefit for the period, or term, you choose—usually 10, 15, 20, or 30 years.

  • During that time your premiums, the amount you pay for coverage, remain the same. No surprises. That’s why the term is also known as the level-premium period.

  • Another good thing about term coverage is that it is relatively inexpensive when compared with permanent policies.

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Why Choose Term?

Term life insurance might be a good fit if you have short-term goals or want financial protection for a specific amount of time. For example:

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If you have a 20-year home mortgage, then you may want to purchase a 20-year term policy. That way, you’ll know that your family can pay off the mortgage and remain in their home should anything happen to you.
A term policy might also be a good option if you want insurance coverage just for the years you are paying for a child’s education.
Maybe you’re paying off a business loan and you don’t want a spouse or partner to be burdened with the balance.

If you’re a small business owner, term insurance can be used to protect against the untimely death of a key employee.

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In each of these examples, the term ends along with your specific financial obligation, so you’re not paying for coverage that you no longer need. For that reason, term life insurance can be a flexible and affordable coverage solution for a range of situations.

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Are There Differences Among Term Insurance Policies?

The biggest differences between term insurance policies are the length of time the coverage is for. Some term policies offer optional features called riders that allow you to customize your policy. For example, you can add your children to your policy or get accidental death protection.

One unique type of term policy is what’s known as a return of premium term policy. With this type of policy, all premiums that have been paid are returned to the policy owner at the end of the level-premium period (terms and conditions may apply).

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What Happens at the End of the Term?

At the end of the term, you have the option of letting your coverage end, keeping it by continuing to pay the premiums, or possibly converting it to a permanent policy. If you do choose to convert, be sure to work with a reputable company that offers quality life insurance options.

If you choose to keep the policy after the level-premium period ends, your premiums will increase each year as outlined in your contract and stop at age 95, when the policy ends.

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What Types of Term Policies Does Prudential Offer?

We offer basic term policies and policies with a range of features to meet your specific needs.

Explore our term life insurance policies  

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Guarantees are based on the claims paying ability of the issuing insurance company.

Prudential, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities.

© 2018 Prudential Financial, Inc. and its related entities.

For Compliance Use Only: 1010861-00001-00

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