The good and bad about term insurance

Term insurance is the purest and simplest form of life insurance.

You pay the company a premium for a certain number of years. Should you die during this time, the beneficiary gets the money.

Should you live, which is very good, you will lose all the premiums paid. And, you get no money at all.

Let's say you take a policy for 30 years. If you are fortunate and outlive your policy -- which, we're sure, you would really love to do -- the investment will turn out to be quite worthless and you will lose all the money you paid.

If you do not outlive your policy (which would be a tragedy), the people you nominate in it will get the money.

In the first scenario, you pay; you get nothing; your beneficiary gets nothing.

In the second scenario, you pay; you get nothing; your beneficiary does.

Either way, you personally do not benefit.

That's the bad part about term insurance.

The good part about term insurance is that it is the cheapest life insurance available, so you pay the least amount of premiums.