TERM INSURANCE Meaning and
Definition
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Term insurance is a type of life insurance policy that provides coverage for a specified period, or term, of time. It is designed to offer financial protection to beneficiaries in the event of the insured person's death during the specified term. This type of insurance does not accumulate a cash value as whole life or other permanent insurance policies may do.
Typically, term insurance policies provide coverage for periods ranging from 5 to 30 years, although some companies may offer shorter or longer terms. If the insured person dies within the term of the policy, the beneficiaries receive a death benefit payout, which is often a tax-free lump sum. However, if the insured person survives the term of the policy, no benefits are paid out.
One of the key advantages of term insurance is its affordability. Since it does not build cash value or offer other investment features, the premiums for term insurance tend to be lower than those of permanent policies. This makes term insurance an attractive option for individuals who have specific financial responsibilities, such as mortgage payments or dependent children, during a particular period of their lives.
It is important to note that once the term of the policy expires, individuals may have the option to renew the coverage, but the premiums are likely to increase significantly due to the advancing age of the insured person. Additionally, some term policies offer the option to convert to permanent life insurance without the need for a medical examination.
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A practical medical dictionary. By Stedman, Thomas Lathrop. Published 1920.
Common Misspellings for TERM INSURANCE
- rerm insurance
- ferm insurance
- germ insurance
- yerm insurance
- 6erm insurance
- 5erm insurance
- twrm insurance
- tsrm insurance
- tdrm insurance
- trrm insurance
- t4rm insurance
- t3rm insurance
- teem insurance
- tedm insurance
- tefm insurance
- tetm insurance
- te5m insurance
- te4m insurance
- tern insurance
Etymology of TERM INSURANCE
The word "term insurance" is composed of two parts: "term" and "insurance".
The term "term" comes from the Latin word "terminus", meaning "boundary" or "limit". It later evolved in English to refer to a fixed or defined period of time.
The word "insurance" has its origins in the Latin word "securus", meaning "secure" or "free from care". The concept of insurance dates back to ancient civilizations, but the term itself appeared in Middle English around the 14th century, referring to a system of providing financial protection against risks and uncertainties.
Therefore, the etymology of the term "term insurance" combines the concept of a defined period (term) with the notion of safeguarding against risks or uncertainties (insurance).
Similar spelling word for TERM INSURANCE
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