Term Life Insurance Details
The reason term life insurance is less expensive than all other types of insurance is a simple numbers game. Term insurance is for fixed periods of time. Since the odds are that the insured will outlive the term of the policy, the risk to the insurance company is minimal, meaning lower premiums for you.The cost of insurance increases on a yearly basis. If an insurance company insures 10 people for $1000 each, and statistics show that one person is likely to die in the coming year, then the premium must be $100. For the next year, the premium will be $111 ($1000 divided by 9), etc. To have guaranteed rates for longer periods of time (10 or more years), the insurance company will offer a set (average) rate for that time frame. Term Life Insurance is generally available in 5, 10, 15, and 20 year terms, or to age 65, age 75 or age 100. The longer the chosen period, the higher the cost. However, buying 20 year coverage is usually less expensive than buying two 10 year plans back to back. Your term insurance policy can also be used to insure more than one person (multi-life). Under the same policy, you could insure your spouse and children simultaneously. The cost of insuring more than one person under the same policy is less than issuing several individual policies. Besides meeting family and personal needs, another major use of term life insurance is in corporate environments, such as buy-sell agreements, business continuation and business overhead. In a buy-sell agreement, partners in a company take out insurance policies on one another to provide money to purchase the deceased partner's shares. In the case of business continuation, if an essential partner in the company dies (eg. the brain behind a software company), the company would likely die too. Business continuation insurance would provide the money to find and hire a replacement so the business can continue. Similarly, this same insurance policy would provide the funds to pay the monthly (business) overhead during the interim period before a replacement is established. | 
