Everything in life is temporary. But one thing which will last long is the seeds of the hard work and efforts that you sow today will help to reap the benefits of a secured life in future. And the best way to do is going for a good life insurance plan. While the vast variety of investment products available in the market today might confuse you as to which one of them is the best for securing the future of your loved ones in case of any unfortunate event, term insurance can be the right key to unlock the doors of safety and security for them.
Term insurance is the basic, inexpensive and easy type of insurance policy to understand. It gives you all the coverage you need and not anything that you don’t wish for. That is why it is the best choice for almost everyone who wishes to insure their lives and arrange for some basic security for their family and themselves. As the name suggests, a term insurance policy is good for a specific period of time; which can be for one year, 10 years, 20 years or even up to 30 years. During the insured tenure, if you die your beneficiaries get a payout, known as the death benefit. However, if you die after the term expires, there's no payout. Term policies typically have issues pertaining to the rising age. If you're past age 80, you'll have a hard time getting term insurance. So, the early in life one buys one policy, the more cost-effective protection he or she gets.
Types of term insurance
There are two kinds of term insurance plans, a) "annual renewable term," which gives you cover for one year at a time and then you renew it annually and "level premium term," which you buy for a specific multi-year period for five, 10 or 20 years. If your main concern is keeping your initial costs down because you think your earnings will rise significantly in the future consider going with annual renewable term. Level premium term lets you lock in the premium for that period; the premium is guaranteed never to change, from the first year to the last. Thus it can be a smart way to insulate you from any premium increases. It's like the peace of mind you get from a fixed-rate mortgage compared to an adjustable-rate one.
The charges and the cost of life insurances depend on your age, your health and the size of the death benefit you want. It always goes this way - the younger and healthier you are, the lower your premium will be.
Term insurance offers some benefits that you can't get with traditional life insurance policies such as:
• Term insurance is the cost effective form of insurance
• Flexibility of the term for which you would like coverage, up to 35 years
• Fixed premium payments which do not increase during your term period
• In case of an untimely death, dependents immediately receive the benefit amount specified in the insurance agreement
• You can customize term life insurance with the add-ons such as Child, Waiver of Premium, or Accidental Death
Term plan help you shield your family from uncertainties in life due to financial losses; in terms of compensating the loss of income in case of your untimely death or critical illness. Securing the future of one's family is one of the most important goals of life.