In the past few years, the government has been continuously urging citizens to obtain individual life insurance policies. It plays the role of an important safety net especially for those with families and are the main breadwinners in the household. In addition, both local and state government require companies to provide employees with group life insurance as an added benefit. Despite the many efforts of the government, the country has been seeing further decrease in the number of Americans buying crucial life insurance products. Even those who have young children and have loved ones to support are foregoing this very important financial product. Unlike what others speculate, nothing can replace the protection, security, and peace of mind that life insurance can deliver. Experts believe that such significant decline is a result of the lack of information about life insurance. By raising the awareness about the benefits of life insurance, there is still hope that more people will realize its importance and purchase life insurance sooner than later.
In essence, there are two types of life insurance policies to choose from, namely term and permanent life insurance policies. Term insurance simply delivers pure death benefits, whereas permanent life insurance is characterized by the added investment that is brings to the table.
In this article, we will enumerate important and fundamental pointers about term life insurance:
Lower payments and a more straightforward policy. These perfectly describe term life insurance. Premium payments that are made for this life insurance product guarantee a predetermined benefit in your untimely demise within the term of the policy. It will provide beneficiaries with a payout provided death will transpire within the term of the signed agreement for the policy. This means that premium payments cannot be returned to the policy holder once the policy expires and the policy holder is still alive. To avoid such wastage, policy holders are given the option of renewing altogether or shifting to another life insurance product without having to shift insurers. Term life insurance is only valuable safety net for your family if and when you die. Policy holders cannot borrow against the premium payments as they do not build cash value at all.
There are different life insurance subtypes. Some can offer protection for one year, whilst some can deliver up to 30 year protection as well. The interest rates on life insurance premiums may be level during the first year, but may increase as you grow older. Renewal for a term insurance is typically done on a yearly basis and can now be mitigated online. Undertaking a medical exam is fairly mandatory during the onset of the contract. Policy holders will be asked to take a medical exam only when their policy is nearly up for renewal.
Term life insurance policy is a no frills life insurance product. If you have solid financial background and only desire to cover for funeral costs and a small part of your family’s future in the short term , then life insurance is the life insurance product that you need.