Term insurance plan is a form of life cover (risk cover), it provides coverage for a defined period of time, and if the insured expires during the term of the policy then death benefit is payable to the nominee. Term plans are specifically designed to secure your family’s needs in case of death or uncertainty. It provides a specific amount of coverage for a specific period of time. If you want to live peacefully without worrying about the future and financial stability of your family (in your absence), a term life plan is what you must buy.
Benefits of Term Life Insurance:
1. Less expensive
Term life insurance rates are more affordable than whole life insurance because it offers protection for a predetermined time. The life insurance company is hoping it will never pay out because you will outlive the term and the policy will expire. Whole life insurance premiums, by comparison, are higher because the policies payout no matter when you die.
2. More flexible
You have many options when it comes to term life insurance. Coverage can last as little as one year, as with annual renewable term life. Or you can lock in rates for as few as five years if you need to cover a short-term debt like tuition expenses while your child is in college. Policies also come in 10-, 15-, 20- and 30-year terms. If, for example, you want a policy that would cover your mortgage and your children’s college tuition, a 30-year policy might be a good match. As these needs disappear over time, so might your need for a policy.
3. Good for young families
Because term life doesn’t build cash value and only covers a specific period, it’s generally less expensive than whole life insurance and a better value for young families. Many young families are financially stressed, shouldering the costs of caring for small children, a mortgage, perhaps an auto loan, saving for college and retirement, and other expenses. Term life insurance can provide peace of mind without gutting your wallet.
4. Simplicity
Term life insurance is easy to understand, which makes it simple to shop around and compare rates. You need to make only three main decisions: coverage amount, length of term, and preferred company. As long as you pay the premium, you’re covered for the duration of the policy.