What is Term Life Insurance?
byon 07-17-2012 at 03:09 AM (127 Views)
"a life insurance for a specified duration limit, or time. You buy a precise
quantity of coverage for a specific time period by signing a contract.
Term life insurance is basically a no frills type of life insurance. It is a life insurance for a specified duration limit, or time. You acquire a precise quantity of coverage for a certain time period by signing a contract. You pay for that coverage period and at the end of the term the policy expires. For example, the term might be until retirement, or until kids are grown, or till college is paid for.
Term life insurance is the least expensive available insurance policy and enables you to invest a lot less and use the extra income in a far better investment. It does not develop up cash value and the premium normally increases as the policy owner gets older. Usually term life insurance covers
a particular term such as term of 1year, term of 20 years or term of 30 years.
If you die while the policy is active, term life insurance supplies a stated benefit for it and your survivors will be paid the agreed upon quantity. However, the policy does not supply any returns beyond the stated benefit and once the policy expires, the insurance coverage ceases and the insurance company keeps the money. Some term insurance policies give you the appropriate to renew at the same rate for multiple years, although other folks do not. The former are normally a bit more costly.
Term life insurance is most suitable for you, if you are:
in need of coverage for a limited period of time,
young and searching for lower premiums,
buying a home or car, where the financial burden of a loan will disappear in time.
Term life insurance policies should be renewed when each term ends. Prior to buying a term life insurance policy, you really should ask about the renewal provisions for the protection of your future insurability. There are some typical choices:
Annual Renewable-----the premium go up every year.
Level Term-----the premium stays the exact same for particular period like 5, ten, 15, or 20 years, then increases sharply.
Automatic Renewable-----youll have to pay far more for this feature.
Some other options on term life insurance policies could include:
Re-Entry - it demands a lower premium than an automatically renewable policy. You can renew at the very same low rate provides to new client but you will have to pass a physical examination. If youve created any wellness troubles, your premium could go up and cost more than an
Convertable term - youll have the choice to convert to a whole life insurance policy in later years. <a href=http://www.exclamationcashadvance.com/>powered by[/url]"