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3. Insights into Insurance — What is term life insurance?

What is term life insurance? Whether you're thinking about buying life insurance for the first time or adding more coverage to your existing insurance, you'll need to determine what kind of coverage is best for your situation. You have two overall options: term life insurance and whole life insurance.

Term life insurance provides protection for a specific amount of time {such as 10, 15 or 20 years). Once the term is over, your insurance policy ends and you are no longer covered.

Why would you buy term life insurance if it has a time limit? Term life insurance normally costs less than whole life insurance and often offers a higher benefit amount. That means you have more coverage when you may have more financial obligations, such as house payments, a spouse who depends on your income, or car payments and other loans.

In addition, some term life insurance policies come with an additional Return of Premium Rider. That means you can receive a refund of all the premiums you've paid if you outlive your term coverage. Some term insurance policies offer you the option to convert your coverage to whole life insurance.

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