Term Life Insurance Explained

– [Narrator] Hey everyone this is Jeremy from Shine Insurance, and
today we’re gonna go over the most simple kind of life insurance. And the one that most financial advisors will tell you you should choose, and that is term life insurance. What you’re gonna learn in
this video is the following, we’re gonna talk about the death benefit, the reason you have a term life insurance, what the word term means, what the face value of
your term life policy is and finally the beneficiary. Let’s start with death benefit. The entire purpose of a term life policy is the death benefit. If you pass away while
the policy is in place, the insurance company will
pay an amount of money to the person or entity that you designate as your beneficiary. So, some money is going
to be put into the hands of the people you left
behind or the entities that you left behind when you passed away. The word term is a very specific part of the term life policy. It is simply the period
of time that the price of the policy is locked in. So the price cannot change during the term that you have chosen, so
let’s take an example here. A 20 year, which is super
common, a 20 year term policy priced at $23.43 I just made
that number up, per month, would stay $23.43 for 20 years. So the insurance company could
not change the price on you no matter what happens with your health or anything like that for the 20 years that the policy is in place. Something interesting that
most people don’t know, is that after that 20
years, the policy does not just end if you’re still alive it will continue, but the price
will increase dramatically most of the time you
don’t wanna continue with the policy after the term ends, because the price is prohibitive. Let’s talk about the face value, this is the other part
of your term life policy. The face value is the amount of money that will be paid out as the death benefit to your beneficiary. So it’s the amount of money you choose that will be paid by the
life insurance company to your beneficiary. So an example, a common example
is a $250,000 face value would pay $250,000 as the death benefit if you were to pass away
while the policy is in place. So you have the term, the period of time that the price won’t
change, and the face value, which is how much will
actually be paid out in the case of your passing. The third element here
is your beneficiary, I’ve mentioned it before in the video, and this is simply the
person, people, business, or non-profit organization that receives the death benefit, so
this is who you choose to get the money if you were to pass away. The most common example is a spouse, so a husband or a wife
that you are married to and you have a family
together or whatever, and you wanna know that
if you were to pass away they could take care of,
you know, the family, maybe pay off the
mortgage, cover any money that you were bringing
in for a period of time to get resettled because of your loss. So that is the most common beneficiary, but there are certainly other examples. Some of them include an estate or trust, so if you set up a will or a trust, which I suggest everyone does, then you may just direct
your life insurance policy to that estate and then
the directive of the estate would be, would figure
out where that money went. You could send it
specifically to your children, sometimes people do this,
but I definitely recommend that you have a trust that
makes it clear, you know, if you had a $250,000
face value, and you had an eight year old and
you were to pass away, suddenly that eight
year old is responsible for $250,000 without any restrictions, that can create a lot of problems, and so most financial
advisors, including myself, would say, you know, create a trust before you create your child as the beneficiary. You could create a parent, often times kids that are in college that have student loans
would make a parent the beneficiary of a small
life insurance policy, so if they were to pass
away that student loan debt wouldn’t become a burden on their parents. And you could also choose
your favorite charity, certainly there are people who purchase a life insurance policy, and
if they were to pass away, those dollars would go
directly to the charity of their choice, so the beneficiary, the person or entity that
receives the face value or the death benefit of
your life insurance policy. Finally a rookie mistake, that folks make, and this is so important, is not telling family members
how to find your policy. When you purchase a term life policy, you need to make sure and
tell your family members where that policy is, how
to contact your insurance agent in the case that you pass away so that they can access the
dollars available to them because you purchased a term life policy. Hundreds of thousands of
dollars in life insurance are left unclaimed because
the people who were beneficiaries did not
have access to information to get to the policy, so
purchasing a term life policy is super important, but
as important as purchasing the policy is making sure
that other people know how to access that
policy, if you pass away. If people don’t know how
to access that policy, then it’s essentially worthless,
because there’s nothing that can be done after your passing. So that’s it, what we learned here, we learned death benefit,
the whole purpose that you have a life insurance
policy is to pay out an amount of money to your beneficiary. Term is an amount of
time, a period of time that the price of your
policy cannot change, no matter what happens with your health or anything like that, the face value is the amount
of money that the policy will pay out as the death
benefit if you were to pass away, and finally your beneficiary
is who gets the money if you pass away. So that’s it, I hope you
enjoyed this life insurance, term life insurance video,
there’s other Shine videos if you’d like to check them out, they include our New Home Buyers Guide, if you’re thinking
about buying a new home, this video really isn’t about insurance, it goes through the process from deciding that you wanna buy a house to the closing and your mortgage payment,
really lines it out really really well, you
should definitely check that video out, personal umbrellas, if you are interested
in liability coverage, additional liability
coverage above and beyond, usually your home and auto policies, Personal Umbrella video
will help you out there, and if you just wanna laugh, Riding Lawnmower Fails is right there on our Youtube channel,
you can look at some folks making some very poor
riding lawnmower decisions and laugh with us. Finally, as always the
last step in this video is please, if you enjoyed
this video, please subscribe to our Youtube channel so that you can get our newest videos
right there in your inbox and in spaces like that, we
would super appreciate it, and then more than anything,
if your really learned from this video please do share it, I always say good
information is only great if it’s shared with
others, go to your favorite social media space, tell
folks that you found this interesting very short,
quick, succinct, to the point video about term life insurance, and they should check it out too. Well that’s it, hope you enjoyed our term life video, definitely go out and check out your local
independent insurance agency ask them about term life insurance and they’ll get you setup, and
if you don’t have somebody, feel free to call Shine Insurance agency, we would be more than
happy to help you out. Have a wonderful day.

Paul Whisler


  1. Hi is there term policy for 10 years n if the term policy is over at end will get the total amount of the outcome in once or like monthly. U mentioned that terms policy will not change the price till term years but after that it change Means???? Do we have choice to continue after the terms policy? Or we don't have ?

  2. So lets say i have a 30 years term, after the 30 yrs is over do i get ALL my money bck or a percentage of it

  3. As a 65 year old and my husband 67 we have no life insurance. Can we get insurance, term life at this age?

  4. What do you do after your term insurance ends? do you just buy another?

  5. So from what i understand is: When you purchase a term oolicy, youre edtimating the tears that you will live? Am i ckose? I am 52 yrs old snd chocked st dinner required the heimlick maneuver. That episode forced us to consider life insurance for my spouse,

  6. This was a great video, but I do have a question. Let's say I get a policy for my parents in Jan 2020 for 20 years and they die two years later. Do you have to continue paying the policy for the rest of the 18 years, or would I get the complete benefits after only paying for 2 years?

  7. If I die less then a month after buying the term ins, would it pay the face value out?

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