What is a term life insurance policy or life insurance generally? A life insurance coverage offers financial safety to your family in the unfortunate occurrence of your death. At a standard level, it involves paying small sums every month (called premiums) to cover the risk of your unforeseen demise during the tenure of the policy. In such an occasion, your loved ones (or the beneficiaries you have named in the policy) will get a lump sum payment amount. In case you live till the maturity of the policy, depending on the type of life insurance coverage you have chosen, you will get returns the policy may have earned over the years. Today, there are lots of variations to this basic concept, and insurance plans focus on a wide array of needs.
Permanent insurance is a life insurance that delivers coverage throughout the insured’s lifetime and may include an element that builds cash value. Permanent life insurance offers lifelong protection. This kind of life insurance policy never stops as long as the premiums are paid. In addition, permanent life insurance coverage gives a cost savings element that accumulates a cash value over a long period of time. There are numerous kinds of permanent insurance. Below are the examples.
Traditional Whole Life stays in force during the insured’s entire lifetime, provided premiums are paid as specified by the plan. Life insurance coverage may also have an aspect for accumulating growth called cash value. Universal life insurance coverage is characterized by its flexible premiums, flexible face amounts, and unbundled pricing factors. Variable life insurance is a form of whole life insurance under which the death benefit and the cash value of the policy vary according to the investment performance of separate account investment options.
Term Insurance is a life insurance under which the death benefit is payable only if the insured dies during a specified period. Listed below are various types of term insurance. Term life insurance is the most affordable kind of life insurance available. It is designed to meet temporary life insurance needs; providing protection for a specified time period, the term which for example, is a term of 10, 20 or 30 years. This kind of life insurance makes sense if you have financial needs that will diminish as time passes, such as a home loan or a child’s tuition.
There are different types of term life insurance. One is level term which is a fixed amount of coverage with premiums that are set over a certain period of time, usually in 10-year increments. Second is increasing/decreasing term wherein the amount of coverage increases or decreases throughout the term, premiums typically remains level. Third is renewable term which includes a renewal provision that gives the policy owner the right to renew the insurance plan at the end of the specified term without submitting proof of insurability. Fourth is convertible term that gives the policyholder the right to convert the term policy to a permanent policy. Last one is group term insurance bought typically by an employer or professional organization that is intended to cover several people, usually leading to reduced premiums.
Term Life Insurance is the most preferred form of Life Insurance today which gives protection for a certain number of years. After all, that is what insurance is for: Protection for yourself and your family.
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