What is term life insurance?
A term life insurance is nothing but a policy with a limited duration on the coverage period. When the policy gets expired, it is totally up to the policy owner in deciding whether to renew the term life insurance policy or to end the coverage. This is a contrast to other type of policy called permanent life insurance. A permanent life insurance is the one in which the policy owner enjoys the duration of 100 years (i.e. until death).
What is Term Life Insurance
Why the word “Term”?
Term life insurance is called as a “term” as the owner will enjoy the coverage for only a specific period of time (most often 1, 5, 10, 15 or 20 years). That is why; this “term life insurance” is called as the “temporary” insurance. In case, the owner dies during the term, the policy will pay the cash benefits to the recipient or beneficiary. However, when the term gets over and if the policy is not renewed by the owner, the coverage will get ceased. If the death occurs after the coverage ceases, the beneficiary will not be paid with any cash benefits.
This term insurance is an uncomplicated type of life insurance which anyone could easily understand the rules and concepts. This term life insurance will be the best choice if anyone is looking out for a maximum amount of coverage with their investment.
Terms and Needs:
Whatever the term life insurance policy may be, the coverage period will be only for a specific amount of time which is called as “The Term”. These policies will be differing according to the owner children’s age, owner’s retirement period and other factors. Many will want to have the insurance coverage until their child graduates from college and in these cases it will be a best one if they make sure that their life insurance coverage includes the money for their children’s overall college tuition fees. Hence, one should have a wide knowledge about the varieties of policies and plans so that they shall avoid any confusion that might happen if they blindly take any policy without knowing its advantage and benefits.
It is the advice of many experts that you should carry the insurance at least until your youngest child becomes 18. So, if your child is of 3-years-old right now, you will want to carry your insurance for at least the next 15 years so that this policy covers the insurance until your child becomes 18. This is one type of example on how you could choose your policy and the policy will be differing according to your child’s current age. But the overall idea is that it would be best if you take the policy covering your child until he or she attains the age of 18. This doesn’t mean that you need to stick to 15-year term instead you could buy an annual renewable policy so that you can renew it for the next 14 years in a line. Whatever the terms may be, you have to compare the terms so that you could make adjustments for the time and value of money which will determine the best value for you.
Different Types of Term Policies Available:
As there are many new “Terms” are involved in term life insurance policies these days it is always better and advisable to know what is term life insurance in general and more specific about the type of policy that you are choosing. You can careful about the money that is being invested without getting into any unknown troubles (or market risks). Do check out for the changes in the policies as these insurance policies may be changing from time-to-time and are not a standard ones.