Term life insurance is a smart way to protect the ones you care about after
you have passed on or are severely injured. It is the original form of life
insurance, as it covers the relevant term and if the insured dies during the
term, death benefits are paid to the beneficiary.
Because term insurance is temporary in nature, its generally used to provide for
covering temporary financial responsibilities of the insured. Such
responsibilities may include consumer debt, dependent care, college education
for dependents and mortgages.
Simplest form of term life insurance is for a term of one year and annual
renewal policy. Much more common than annual renewable term insurance is
insurance where the premium is the same for a given period of years. The most
common terms being 10, 15, 20, and 30 years. Most level term programs also
include a renewal option to allow the insured to renew for a maximum guaranteed
rate if the insured period needs to be extended. Insurance rates increase with
age, so it seems sensible to protect your family as soon as possible.
There are lots of policies you can select from. The main advantages of a term
life insurance are – coverage during the term and low premium rates.
Advantages of taking life insurance
i. Help the dependents post premature death of the bread earner.
ii. Protection from creditors
iii. Property preservation
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