Term Life Insurance

Business, Legal & Accounting Glossary

Definition: Term Life Insurance

Quick Summary of Term Life Insurance

A type of life insurance that protects the insured person for a certain amount of time; the “term” that is stated in the policy.

Full Definition of Term Life Insurance

Term life insurance is a form of life insurance that provides coverage for a specific period of time.

Term life insurance is generally bought for a period of years or decades and covers accidental death and various injuries.

Unlike whole life, which provides coverage until death or age 100, term life insurance does not have an investment element to it; thus, term life insurance cannot provide any money in addition to its stated amount.

If the holder of a term life insurance policy or his/her beneficiaries makes no claims during the coverage period, the policyholder or beneficiaries will reap no returns from the policy. Because of its shorter duration and lack of investment component, term life insurance tends to be less expensive than whole life. However, premiums do rise as the term life insurance policyholder ages.

Examples of Term Life Insurance in a sentence

In the divorce decree, the husband was required to carry a term life insurance policy for $500,000 to cover the child support obligation.
The maturity date on her term life insurance is in June, and she will use the cash surrender value amount to pay for her first year of graduate school.

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Term Life Insurance. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. July 04, 2020 https://payrollheaven.com/define/term-life-insurance/.
Chicago Manual of Style (CMS):
Term Life Insurance. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/term-life-insurance/ (accessed: July 04, 2020).
American Psychological Association (APA):
Term Life Insurance. PayrollHeaven.com. Retrieved July 04, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/term-life-insurance/

Definition Sources

Definitions for Term Life Insurance are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 15th February, 2020 | 3 Views.