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Term Life Insurance

Life is full of uncertainties, and one never knows what the next moment is going to bring. We are not alone in this world and our family suffers, whenever something happens to us, especially if you are the bread winner. The worst situation is in the event of death. Not only your family grieves your loss, but suddenly they are left to fend for themselves. They have been dependent on your income, and everything seems to go out of control, when you are no longer there. To spare your family and near ones this agony, it would be wise to take an insurance policy, on your life.

If you are looking for something that will simply cover the risk of death, at the least premium, then term life insurance, would be the best option. This type of insurance will pay a death benefit only, in the event of death of the insured person, during the period of the policy term. You can choose a policy term, which usually ranges from 1 to 30 years. The 20 year term is the most preferred by many people.

Compared to other types of insurance policies, term life insurance is the most inexpensive, and has a lower initial cost. This policy does not have any features like policy loan provision, cash value accounts and so on, which is common among permanent life insurance policies. term life insurance will just pay the death benefit, in the form of the insured amount. This is a lump sum amount, the beneficiary that you have chosen, will receive in the event of your death. Due to the absence of features in this policy the premium you pay will also be less, compared to other policies. You will not have any accumulated cash value in, term life insurance policy.

This type of policy is ideal for persons who are starting a family life, and who are having a tight budget. The person will be able to buy a high level of coverage, at low premiums. The individual can also decide the period, when the need for protection is the greatest, and choose the policy period accordingly. This period also can be goal oriented. Suppose you want to accumulate a certain amount for your child's future education in a certain number of years. Then you should take a term life insurance for that period, and for the amount you are planning to accumulate. Then in the unfortunate event of your death, during that period, that sum will be assured for your child's education. Also this type of policy is good to take, when you are taking a term loan, or a mortgage on your house. Here too in the event of your death, your family will not have the burden of the loan or tension of losing the house.

Usually the premium rate on term life insurance will remain the same, throughout the period of the policy. You can make sure of this, before you take the policy from your insurance company.

Advantages of Term Life Insurance

There are two basic advantages of term life insurance policies, owing to which they have become widely advocated and popular. The first advantage is that term life insurance policies are the cheapest form of life insurance and hence prove to be affordable for a variety of people, from different economic backgrounds and strata of society. The second advantage is that term life insurance policies allow the bearer to leave behind a lump sum of money to the family. This is a favorable aspect as many people have family members depending upon them who are sure to suffer financially in the event of death. Also, Term Life Insurance policies allow the living family members of the deceased to pay off mortgages and loans without having to incur any additional losses.

Disadvantages of Term Life Insurance

Conversely, there are two disadvantages of term life insurance policies as well. The first is that these term life insurance policies often prove to be far more expensive than decreasing term insurance policies that can be availed for the purpose of mortgage protection. Secondly, the policy is valid for payment only if the bearer of the policy dies, or in the case of an additional critical illnesses cover, is diagnosed with some critical illness. If the bearer of the policy outlives the term of the policy, there is no remuneration as these policies do not involve any maturity value which offers for compensation at the end of the allocated time period.

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