What Is Term Life Insurance?

Term life insurance is known to be the most simple and affordable option when compared to other types of insurance. Term life provides coverage for a set period of time or “term” that typically lasts 10-30 years, and is designed to protect your beneficiary (in this case, the nonprofit you’ve selected). If you perish during the term period, your beneficiaries receive a lump-sum payment (also known as the “death benefit”). When choosing, select a term based on how many years you need coverage.
During the term, you’re required to pay a monthly premium for the term to keep the policy in place/active (similar to car insurance or a subscription). If you were to die during the term, whoever you designate as the beneficiary will receive the lump-sum payment from the policy.
If you live through the duration of your term, you’ll have the option to either elect to let your policy to end, or in some cases, you’ll have the ability to renew your coverage. Alternatively, you can re-apply for a new policy – but keep in mind, insurance premiums (particularly for life insurance) increase as you age. Re-applying after your initial term means your rate will be much higher, so consider a term that’ll last until you anticipate no longer needing coverage.
If you perish after the term ends and you haven’t renewed your coverage or purchased a new policy, no benefit will be paid to your beneficiary. So do your best to ensure that the nonprofit(s) you’ve selected as beneficiaries are covered.