Is term life insurance policy your pick of the bunch?
The life insurance premium that is payable for a stipulated period like 5 years or 10 years is called term life insurance .Since it is paid for a period of time it is called term life insurance .Generally the premium for this insurance is quite high than that of other insurance .If you are particularly interested in this kind of insurance take a look at it. The article covers
- What is term life insurance?
- Types of term insurance
- Advantages of term life insurance
- Disadvantages of term life insurance
Term life insurance is one of the major classifications in insurance. This insurance is typically taken for periods like 5 years 10 years or 15 years. The premiums are generally high when compared with the other type of insurance namely permanent insurance. The premium amounts increase gradually over a period of time. The sum insured in a term insurance is paid to the dependents on the death of the insured.
The best time to go for term insurance is when the insured is very young. The financial commitments are less during this period of a person's life. Another advantage of insuring at the early stages of life is that a person enjoys good health. Therefore the insurance premiums will be lower when compared with insuring at an old age. This will also help you to get cheap life insurance quotes.
There are no standard premiums as far as term insurance is concerned. A person can decide the amount to be paid on the basis of his requirements in terms of coverage and affordability in terms of
finance. If the insured does not die at the end of the policy period the amount will not be repaid. The insured has the option of renewing the term insurance policy though at a higher rate and even in that case the rule of paying insurance amount to the dependent will apply.
Types of Term Insurance:
Term insurance can be further classified into the following categories:
Level Term
In this type of insurance everything will be levied at a uniform level right from the premium of payments to the period for which it is payable.
Increasing and Decreasing Term Insurance
In this type of policy the insured has the option of altering the policy amount. The insured can either choose to increase the amount or decrease it. However in any case the insurance premiums remain uniform over the whole term.
Renewable Term
Whereby if an insured does not expire during the term for which the insurance is taken he has the option to renew it after that period. It needs to be understood that he will
be required to pay a higher amount of premiums on such renewals. Even after such renewals the insurance amount will be paid to the dependents of the insured after his death.
Convertible Term Insurance
The insured has the option of converting the term insurance into other policies. This will be of help the insured to make use of the time advantages of these types of insurance and thereby get rid of the limitations by converting it into a suitable and desired policy. This is advised for those who need permanent protection after a point of time.
Group Term Insurance
The term group insurance is not only applicable to term insurance but to other forms as well. Group insurance is usually taken by an employer. The premiums are collected from the monthly salary of the employee and deposited in the insurance company. However unlike in other insurance group term insurance is taken only for particular periods. The premiums will still be lower.
Continue to:
Advantages and Disadvantages of Term Life Insurance
Related Articles
What are the kinds in life insurance policy?
Can I supplement my life insurance policy?
Is availing credits possible in life insurance policy?
Am I endowed with monetary benefits during my lifetime?
Does a group life insurance policy your choice?
Can I expect return on investment beyond protection?
Group Term Life Insurance - Do the Conditions Satisfy You?
Variable Universal Life Insurance - Flexibility at its Best?
Has Return of Premium Life Insurance (ROP) Come to Stay?
Joint Life Insurance - No Extra Benefits for You Here
Act Smart! Get AD&D Insurance Policy!
Is the seller of life settlement sure to die? Viatical Settlements
