Term insurance is life insurance which provides coverage for a limited period of time (“the term”) at a fixed rate of payments (“the premium”). After that period expires, coverage at the previous rate of premiums is no longer guaranteed. If the insured dies during the term, the death benefit will be paid to the beneficiary.
Term insurance is relatively cheap compared to permanent life insurance or variable life insurance, and is meant purely for income replacement in case of the death of the insured. It is the simplest form of insurance with no added benefits.
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