We at Freisenbruch know that purchasing coverage can be quite confusing. In this video, you will learn about the most common and simplest kind of life insurance policy you can buy—Term Life. Here are the important facts about term life insurance policies.


How Term Policies Work
The word ‘term’ simply means that you are renting the coverage for a period with a locked-in premium. The price cannot change during the period that you have chosen. For example, a 20-year term policy can be priced at $23 per month. That means that the premium is fixed at $23 per month for 20 years. The insurance company cannot change the price no matter how your health may change after you are approved. You may be able to renew a term policy at its expiration, but the premium will be recalculated for your age at the time of renewal. Unlike whole life insurance policies, which have a savings component, term life policies have no value other than the guaranteed death benefit.


Face Value
The face value is the amount of coverage you have been approved for. It is the amount of money that will be paid out by the insurance company as the death benefit to your beneficiary. You need to be sure you are comfortable with the amount as it will not change for the duration of the policy.


Death Benefit
The main purpose of any life insurance policy is the death benefit. If you die during the term of the policy, the insurance company will pay the face value of the policy to your beneficiaries. This cash benefit—in most cases, not taxable—may be used by beneficiaries for any purpose, such as settling your debts or covering the beneficiaries’ living expenses. For example, if you are a business owner approved for a term policy with a face value of $100,000, have designated your business as the beneficiary, and pass away during the term of your policy, your business will simply receive the $100,000. However, if the policy expires before your death, there is no payout.


This is simply the people or entities that you designate to receive the death benefit. The beneficiary may be one or more people, a business, or even a charity organization. At Freisenbruch, we highly encourage our clients to review their beneficiaries each year.


FM Editorial Contributor, Jessica Maiato



For more information contact Jessica Maiato, Life Insurance Sales Agent on 294-4618 to see how we can cover all of your life insurance needs.



Front Street, Hamilton
(441) 296-3600