Term Life Insurance Plans
Are you in the market shopping for a life insurance policy? Are you wondering which one between term life and whole life insurance is right for you? Here we discuss everything you need to know about term life insurance.
What Is Term Life Insurance?
Term life insurance offers you coverage for a specified number of years. This means that your named beneficiary can only receive a death benefit if you pass away before the policy term is up.
Once the term expires, you can renew it for another term, convert the term policy into a permanent coverage or allow the policy to terminate altogether. The term limit for a term life insurance can be anywhere from one to 30 years.
Keep in mind that term life insurance plans don’t accumulate savings that you can use to apply for loans or any other purpose. The policy cannot be used for estate planning or charitable-giving purposes.
However, they are relatively cheaper than whole life insurance policy plans.
This type of policy is ideal for individuals who want a relatively simple life insurance policy. It is also best fit for someone who only needs to provide some form of financial protection for their loved ones.
Policyholders of a term life insurance policy don’t have time, budget, or inclination to use the plan as a financial investment.
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What Are the Key Features of Term Life Insurance?
How Are Premiums Calculated for Term Life Insurance Plans?
The primary factors that determine the policyholder’s premiums include age, health status, and gender. Depending on your policy’s face amount, a medical examination may be required before your policy application is approved.
Other factors that may be used to establish how much money you pay in premiums include your occupation, smoking status, current medications, family history, and hobbies. Premiums are usually flat for the entire duration of the policy term.
The policy comes in three different formats that you can always choose from depending on what suits your needs best.
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