A term life insurance policy is the most affordable form of life insurance cover, which is designed to financially safeguard one’s family in the event of the death of a breadwinner.
What is Term Life Insurance?
It is a pure life insurance policy that offers financial protection in the event of the death of the life insured during the term of the policy.
How Term Life Insurance Works
Note that other than the guaranteed death benefit, term life policies offer no value. Its purpose is to give insurance to individuals against the loss of life and the cash benefit, may be used by beneficiaries of the policy to settle the policyholder’s healthcare and funeral costs consumer debt, or mortgage debt, etc.
Term life insurance does not cover for estate planning or charitable giving purposes. All premiums of term life cover the cost of underwriting insurance and are typically lower the permanent life insurance premiums.
Types of Term Life Insurance – Term Life Insurance QuotesÂ
There are three types of term life insurance policy, and you can choose any that works best for you.
Level term, or level-premium, policies
This category covers for a specified period ranging from 10 – 30 years. Here, both the death benefit and premium are fixed and the premium is comparatively higher than yearly renewable term life insurance.
Yearly Renewable Term (YRT) Policies
This particular policy has no specified term but is renewable every year without requiring evidence of insurability each year.
Decreasing Term Policies
Decreasing term policies have a death benefit that declines each year according to a predetermined schedule. Here, the policyholder pays a fixed, level premium for the duration of the policy. Decreasing term policies are mostly used in concert with a mortgage to match the coverage with the declining principal of the home loan.
Who Benefits from Term Life
The term life plan is most attractive to young couples with children, but parents may also obtain large amounts of coverage for reasonably low costs. Note that upon the death of a parent, the significant benefit can replace lost income.
Term life will also be beneficial for people who temporarily need specific amounts of life insurance.
Why a Term Life Insurance is important for your family’s future
In the event of the death of a policyholder, a lump sum is paid to your family.
Along with lump-sum payment, you can decide to get the benefits in the form of regular monthly income.
In the event of accidental death, disability, or critical illness, riders can be added to the base Term plan for improved benefits.
Benefits of Term Life Insurance
It is a tool, which can save you and your family from the financial hardships brought as a result of death, disability or disease.
It provides a lump sum to meet up the immediate family policyholders’ needs.
Offers a regular income to meet their household income (if opted).
Secures your family’s future today from tomorrow with a good term life insurance policy that will cater to your family even in the event of your demise. Life happens, so you should be ready for it.
