Understanding Term Life Insurance Policies
Understanding term life insurance before buying a term life insurance policy can be confusing. Buying a Term Life Insurance policy is to ensure that their beneficiaries have enough money to maintain their standard of living after the policyholder dies, but understanding term life insurance policies and when to buy a term life policy can be confusing.
Beneficiaries are the people you designate to get the money from the life insurance policy after you die. This money is called a death benefit.
You may designate one or more beneficiaries. If you designate more than one, you must decide how to divide the money. You may also choose a secondary or contingent beneficiary to receive the money if the primary beneficiary dies before you.
Life insurance isn’t an investment. An investment is a financial risk — you might make money but you also might lose some or all of your money. In contrast, life insurance pays a guaranteed death benefit.