Exactly what is Term Life insurance? I have been paying on it 2 years and not quite sure what it is all about

What is term insurance? It is the type of insurance that provides a level death benefit for life. Just like car insurance, if you don't pay your premiums, you will lose coverage. Advantages of having term insurance are: premiums are very low during the term, you have more flexibility to invest your money in a savings vehicle (hence the phrase, "buy term and invest the difference"), and if you were to die during the term, your beneficiary will get the face amount and all your investments. Another advantage is that you can change the amount of coverage without affecting your savings and vice versa. (In cash value life policies, you are stuck with paying into both.)

The disadvantage of term that while premium remain fix for certain amount of period (10, 15, 20, 25, 30, or 35 years), the premium will go up when it is time to renew. Majority of term policies provide renewable term coverage up to age 100. But there are some term policies that stop coverage after the level term expires because the insurance company wants you to convert it to whole life or universal life.

Why would people buy term insurance? First, premiums are very low and remain fix during the term. In the early stages of your adult life, you probably have lots of debt to pay off such as your mortgage, you probably have kids to support, and you probably don't have much money saved for retirement. So you need lots of insurance coverage to protect the family. As you get older, your kids are all grown up, your mortgage is or almost paid off, and you better have lots of money saved for retirement. As you get older, you probably won't need life insurance or need as much coverage as you did 20 to 30 years ago.

What happens when the level term expires? When the level term expires, you enter the phase of the contract called "Annual Renewable Term." That means you have the right to renew the term without having to provide proof of insurability. The premiums will go up every year or so (check the policy on how often the premiums goes up after the level term). Depending on your policy, you are usually given several options when the level term expires.
(1) You may convert it to a permanent whole life policy (which I don't recommend).
(2) You may exchange it to another level term (I recommend that you significantly lower your coverage amount to a minimum of $20,000). You may need to provide proof of insurability.
(3) You may refuse to pay the premiums to cancel the policy (if you do this, I highly recommend that you allocate the money toward your retirement).
(4) You can change the death benefit to the amount you really need. In most cases, the amount of coverage you need is usually lower than what you needed years ago. In fact, you probably won't need life insurance as long as you enough money saved.

term policies are the cheapest type of life insurance. they are usually beneficial when you only need coverage for a certain time period and provides no cash value. it provides coverage and the premium stays level for whatever term period you purchased - usually 5, 10, 15, 20 or 30 years. after your term level has expired, your premiums will increase (usually a substantial increase) and will then continue to increase each year. your policy would stay inforce, usually to age 99 or 100, after the level period as long as the increased premiums are paid.

most term policies have a feature to where you can convert your term coverage to a permanent form of insurance - whole life or universal life. these 2 types of insurance provide lifetime coverage while earning cash value. once it earns enough value, it can be used to pay the premiums, take loans or withdrawals against the value, or the surrender value would be sent upon surrender of the policy.

you should check your policy for further details and contact your agent or insurance company if you have any additional questions.

Term insurance is life insurance that provides a death benefit to your beneficiaries if you die during the term of coverage. It usually is for 10, 20 or 30 years, whatever you contracted for. I hope you picked level term as the premiums you pay stay level for the entire time of the policy. Term insurance unlike Whole life or Universal life doesn't build cash value but is less expensive. Your agent should have told you about Return of Premium rider. What this is is that at the end of your insurance coverage you haven't died you get all the premiums you paid back tax free. I hope this helped.

You bought it and don't know what you bought? Go to Yahoo Finance, click on "Personal Finance" and read about life insurance.

term life ins is like it sounds it for a certian amount of time, a certain term so to speak, pay through a certain term money adds up then when you get to retirement age you have a savings, cause when you get to retirement age you need money more and insurance less, and also during that term you premium can't go up.

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