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Planning Beginner: Introduction to Term Life Insurance

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1.
Term life insurance provides coverage for a limited amount of time rather than your entire life.
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True. That is why it is called term life insurance.
2.
Which of the following forms of term life insurance covers one year at a time?
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Annual renewable term. Though it covers one year, it is allowed to renew.
3.
If you receive a benefit from a term life insurance policy, you must use it only for basic living expenses.
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False. You may use the benefit for anything you wish, not just basic living expenses.
4.
With term life insurance, "convertibility" refers to the ability to _______.
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Convert a term life policy to a whole life policy. This can be a useful option for some term life holders.
5.
If you reapply for a term life insurance policy whose coverage has expired, you are guaranteed the same premium you paid before.
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False. Typically, you will pay more, and you may have to meet stricter requirements, too.