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It’s crucial that insurance buyers understand all the products and services available to them. At World Financial Group, associates strive to educate each client about all of his or her options, in addition to potential lifestyle changes — such as paying off debt and establishing an emergency fund — that could improve his or her financial wellbeing. The goal is to make sure clients have the best opportunities to strengthen their finances and build a better future for their families. In this article, World Financial Group reviews the meaning of term life insurance, including its benefits and drawbacks.

There are generally two categories that life insurance policies will fall into – term and permanent insurance. Many different types of insurance policies are grouped into each category. Understanding term life insurance is only one piece of the puzzle. It is necessary to understand all the policies that fall into each category to make a more informed financial decision. The following definition is just the first step toward a complete understanding of life insurance.

Term Life Insurance Defined

Term life insurance policies are only valid for a specified period of time, or term. If the policyholder passes away during that coverage period, his or her beneficiaries will be covered according to the original agreement of the policy. This is a stark contrast to permanent life insurance, which, as the name implies, doesn’t expire.

If a term life insurance policy expires, the policyholder can determine whether he or she wishes to renew the contract. However, it’s important to keep in mind that the contract may change based on the current circumstances — such as health and age — of the policyholder and various financial markets. Failure to renew the contract under its new terms will result in a loss of the death benefit altogether, and since there is no savings component in a term policy, there is no monies accumulated by the end of the coverage period.

In some cases, when an associate from World Financial Group reviews the details of term and permanent life insurance, the client finds there are more long-term benefits to a permanent policy. However, many other people find that term life insurance policies are ideal for their financial goals. These policies have much lower monthly premiums, and the payments are set at a specific amount that will not change for the duration of the policy, so it’s easy to plan and budget. Over the short term, these policies are much less expensive, however, they can be more expensive in the long run if you continue to renew the policy.

World Financial Group, Inc. (WFG) is a financial services marketing company whose affiliates offer a broad array of financial products and services. Insurance products are offered through World Financial Group Insurance Agency, Inc. (WFGIA) or its subsidiaries. In California such services are provided under the name World Financial Insurance Agency, Inc. WFG and WFGIA are affiliated companies.

Headquarters: 11315 Johns Creek Parkway, Johns Creek, GA 30097-1517. Phone: 770.453.9300