Term life insurance, also called universal life insurance, or temporary life insurance, is life insurance which provides coverage for a specified term, the applicable term. This type of coverage is utilized by people who are looking forward to specific financial goals. They may need this life coverage when they are approaching retirement age, have a pre-existing illness and so on. People in these situations may consider term life insurance as an ideal option to ensure financial security in the event of their death.
Term life insurance policies are available to anyone with a savings account and at least $1.5 million of income. These policies are very simple and easy to understand. Basically, once you pay a premium, you receive a death benefit upon death or when the policy isterminated. The death benefit is based on a percentage of the premium payment and is paid automatically. Therefore, it is important to carefully review the benefits and premiums before making a choice on coverage.
If you purchase level term policies you will be guaranteed coverage for a certain level of time. This means that the benefit will never fall short and you will always receive a death benefit. Unlike variable life policies, there is only one premium payment required for both life insurance and other types of insurance. This is because the premiums are level. Therefore, there is no possibility of exceeding the benefit.
Level term insurance is very flexible, which makes it appealing to many consumers. In fact, it provides the most flexible options among various types of life insurances. It is also relatively low premium and offers long-term and guaranteed returns. However, it does not provide financial protection for children or others who depend upon you. Thus, it is not an appropriate option for those who are expecting kids or for the elderly.
As compared to level term life insurance policy, whole life policy term insurance is a bit more expensive. The premium for this policy is higher than premium for level term insurance policy. The insurer provides financial protection for the insured for a definite period. However, you may end up paying the same amount every month until the term expires. You are required to pay a reasonable additional fee during the term, which serves as your co-payment.
Lastly, a variable life insurance policy allows you to determine the amount of money that will be paid out as a death benefit. This differs from the death benefit that the insurer provides. In addition, there are also additional features that you can choose to include in your policy. These additional features are commonly referred to as riders and are often very useful to policyholders.
Although term insurance plans tend to be cheap, you should still compare the various options that you have so that you can get the best value. The best way to do this is to ask quotes from at least three different insurance providers. Also, it pays to talk with your local insurance agent to get a better understanding on the various policies that are available in your area. By gathering quotes from a wide variety of life cover providers, you can determine which ones provide you with the most affordable premiums and also determine which ones offer features that you want.
As term plans are inexpensive, they can be quite useful for insuring an entire family. As long as you have adequate coverage that will protect your dependents in the event of your death, then you won’t have to worry about spending a lot of money on your funeral or on their finances. Also, by spending a few years paying a lower premium, you can ensure that your children are properly covered in the event of your death. After all, it is important for them to understand how important your finances were to you.