Term life assurance is a form of life assurance that is one of many types of insurance available on the market to people looking to protect their assets against them being taken away. You will find these type of policies give life assurance for a specific number of years for a specified cost which is called the life assurance premium. This type of life assurance policy tends not to build cash value and then term is usually called "pure" insurance, this is the case when the purchaser of the term life assurance buys protection in case of their death and that only.
Factors that determine term life assurance
In fact life assurance companies tend to sell term life assurance with differing types of three factors which are the length of the term or the coverage, the premium or cost to be paid to insure the person, and the amount of protection of benefit that will be paid out on the event of death.
You will find that the amount of protection or benefit that will be paid out on the event of death will either remain constant of in fact decline and the term can vary from one to more years depending on what the person requires, with the premium or cost able to remain level or increase.
This type of life assurance policy has the premium or cost fixed for the period that the person requires which is usually five, ten, fifteen, twenty, twenty-five, and thirty and maybe even thirty-five years depending on the requirement and what it is going to be used for. This type of policy is commonly used to help a person plan long term and to protect an asset such as a property and tends to be quite popular because of the fixed cost makes it easy for a person to budget for and they know it is going to stay the same throughout the duration of the term life assurance. You may find that when the life assurance reaches the natural end of its term, it maybe able to be renewed or converted. Some insurance companies however may not offer this type of renewal and may insist on some kind of proof of their insurability so as to lessen the risk that the insurance company makes and the usual procedure is to decline people that may be of a high risk nature.
What about annual renewable term life assurance?
A type of renewable life assurance is annual renewable term which is a one year policy which will insure the person without looking into the insurability of the person as much and with the cost or premium of the life assurance set for the suitability of the person's age.
If during the term of the policy, the person dies before the term has expired, the estate or the beneficiary named to receive the benefit will receive the amount to be paid out. The general exclusion is if the person commits suicide, then no payout is made. The person however, will not receive anything if they survive the maturity of the term life assurance and the policy will expire and the insurance company will retain all monies received.