Many people buy life insurance today but while many of us are familiar with permanent or whole life insurance far too many people overlook the usefulness of arranging temporary life insurance like term life insurance.

A term life insurance plan is a temporary form of insurance that covers you for a stated period of time giving you a stipulated benefit on death for a premium that is normally paid each month, annually or as a lump sum at the start of the insurance period. At the end of that time the plan simply lapses unless you purchase cover for an additional period of time.

As long as you keep a term life insurance policy in effect by paying your premiums as agreed under the contract the policy can give you very considerable protection for your loved ones at often extremely low cost and it is therefore an ideal type of life insurance for young families when fund are tight and you cannot afford the relatively high costs associated with traditional whole life plans. Indeed, many people are pleasantly surprised when they discover just how low a term life insurance quote can be.

A term life insurance policy is simple to understand there are essentially only three things that you need to pay attention to.

The first is the face amount of the policy which is the sum of money that the insurance company pays out to your next-of-kin or other nominated beneficiary in the event of your death. This sum is normally fixed at the outset of the contract although it can also automatically increase over time or be increased at your request with an associated rise in your premium.

The second is the premium which is simply the sum of money that you pay generally once a month, yearly or as a lump sum at the beginning of the plan to secure the pay out of the face amount at death.

The third is the term of the policy which is simply the time period for which the insurer will provide cover. Should death occur during this period then the insurer will pay the the policy’s face amount but, if you outlive the term, the policy will lapse with no cash value.