Term Life Insurance
Term life insurance guarantees a defined death benefit during a specified term period. The term life insurance policyholder will not receive any special savings account benefits.
Who Is It For?
Married couples with families and single individuals require coverage in the case an unforeseen event happens, which results in the loss of life. Term life insurance is for individuals with limited resources and families with major assets that need coverage. Many people are in the starting echelons of their careers and need reasonable and affordable coverage.
How It Works
The policyholder pays the monthly premiums for a designated time frame. The insurer will pay death benefits if the insured passes away during the defined benefit period. You will not receive a refund of your premiums after the specific term period of the policy has expired.
Different Types of Policies
Level Term Policy
The policyholder pays the same monthly premiums for a cumulative timeframe between five and thirty years for the face value of the policy. The monthly premiums and death benefits remain fixed.
Renewable Yearly Term Policy
This is a variable rate yearly renewable policy. It is beneficial to have this policy since you do not have to provide evidence of your insurability. This guarantees that you will be covered for the duration of your life. Howbeit, your premiums start at a low rate, and the rates will increase as you age. This policy is not attractive for very many policyholders.
Decreasing Term Policy
Families have homes with mortgages. As you pay off your mortgage, your home increases in value. Decreasing term insurance coincides with the declining amortization interest schedule of the home loan mortgage. With decreasing term insurance, your premiums remain level, but your benefits decline yearly during the life of the insurance policy.
Term life insurance is not as expensive to insure like whole life insurance. In most cases, the insurer does not pass away during the defined benefit period. Therefore, the insurers pass the savings on to the consumers. You can get a large sustainable policy with low premiums that will cover your assets while you are accumulating resources and wealth.