Basis of a term insurance policy
The most basic of the types of life insurance is term insurance and it is a form of temporary cover. You would apply to the insurance company for an amount of cover for instance $20,000 and you would take it out for a set term, let’s say a 20 year period of time. Once approved you would pay a level premium for those 20 years and if the insured died the beneficiary of the policy would receive the death benefit which in this case is $20,000. If the life assured survives the term the policy expires and he is no longer covered so he would need to take out a new policy dependent on his new needs at this time, 20 years later.
