Term Life Insurance

Term Insurance generally pays on death to provide financially for family members who are still dependant in the immediate months or years following. Hence, the premiums are not considered to be savings but are taken to be expenses. If death does not occur, there is no maturity payout upon completion of the duration of the policy. Therefore, a term insurance plan is typically 60 to 70 per cent cheaper than insurance plans with a savings purpose.

You can choose to have protection for a set period of time with term insurance. If you were to die or become totally and permanently disabled (if the benefit is provided) during that period, your immediate dependants will be paid a death benefit.

Level term products are the most popular plans purchased by individuals today. The level term can be from 10 years to 30 years. The premium and death benefit are designed to stay level during the term of the contract. The premiums can be either guaranteed or not guaranteed. When purchasing a level term life insurance policy, be sure you are aware of the guaranteed premium period. This is to ensure that once you have been approved, accepted the policy and placed the policy in force by paying the first payment, the insurance company is obligated to keep the policy in force as long as you keep paying the premiums.

You are not obligated to pay, but once you stop paying, the policy will lapse after a short grace period. If you need insurance beyond the term of the policy, the premium rates will increase and you will probably have to provide evidence of insurability at that time.

Labels: Term Insurance Plan