Term life insurance is the purest form of life insurance and is the most cost-effective. Term insurance is a type of insurance in which payment is made in case of the death of the insured person during the insurance period (beginning five years). It also provides additional benefits, such as accidental death.
In this insurance, the fixed premium can be paid at one time or regular intervals for the entire policy term or a limited period. The premium amount may vary depending on the payment method opted by the insurance buyer.
Which case you may need term life insurance
You are the only bread earner in your family – the insurance premium amount can be used by your family members to manage monthly expenses and handle the cost of a child’s education.
Insurance for your hard-earned property: Everyone dreams of having their own lovely home, but you don’t have enough money to buy home. In this case, you take a loan from the bank, and if something happens to you, then your loved ones may have to bear the burden of repaying the loan. In such a scenario, the term life insurance premium that the family is going to receive can be used to pay off the outstanding loan.
What lifestyle are you using– In modern times; we are all using a fashionable and lazy lifestyle, which can lead to disease. An insurance plan will not protect your family after your death due to a lousy lifestyle but yes during his lifetime by protecting from critical illness. This facility pays for the diagnosis of some dangerous diseases such as cancer or heart attack.
Who can take term life insurance?
Everybody can take term life insurance. You can take term insurance on individuals or jointly (spouse / significant other). Insurance is paid only to beneficiaries in cases of death during the term of the insured, which the insured can choose (this can range from 5 years to a lifetime). However, some insurance companies offer TROP (Term Return of Premium Plans), which refunds the premium paid in the event of the insured surviving during the policy term.
The concern is that most people were conditioned to see insurance as part risk cover and part investment. Term life insurance eliminates part of the investment and focuses on the payment of the insured (which is provided in other insurance forms such as endowment, money-back, and ULIPs).
Conclusion: As a result, the term life insurance premium, with the same amount guaranteed, is much lower than other types of insurance. Term insurance is the most realistic form of insurance for purchases, as the money you save by purchasing it can be invested in an ETF (exchange-traded fund), mutual fund, or SIP (Systematic Investment Plan) or any other savings investment.
Note: When the insurance period expires, coverage will not be guaranteed at the same premium rate. If the insured dies during the policy period, then his beneficiary will get the death benefit.