Term life insurance cover is one of the cheapest type of insurance coverage available and least complicated. Coverage for such a type of insurance is for a fixed term or a period of time which is usually between 1 to 30 years and can be renewed.The policy pays beneficiary a fixed amount in case of the death of owner of the policy during the term. The premiums are lowest when one is young and as you grow older the renewals are higher. These policies don’t build up the cash value. As the name suggests this type of insurance policies provides protection for a specified period of time.
If the owner of the policy die within a specified period and the policy is in action, then a death benefit will be paid to the beneficiary. There is no accumulation element or cash value within the term life insurance. This term life insurance is for
- People with a temporary need for life insurance protection.
- Those who have requirement for large amount of insurance but want it within a limited budget.
- A person with specific business needs which may include business owners who want to cover the life of key employee.
- Term Life insurance provides protection for a low cost.
- If your needs change most term insurance allows you to convert to a permanent life insurance policy without need to take up any medical examination or provide any another information about the health.
- Term life insurance is a good way to substitute other coverages, when one has been given financial responsibilities within a given period of time.
- The death benefits in such a case which are received are generally free from income tax.
- The premiums which one pays generally increase with age, and they could be affordable later in the life. There is no cash value element, so one tends to miss the tax-deferred growth of the cash value for permanent life insurance like Whole Life Insurance.
- Once the term period expires one should renew the policy as and when possible.
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