Understand The Term Life Insurance

Everyone knows how important it is to secure our life. This is the best thing that we can do to our dependents be it spouse, children or parents. Therefore we understand why every one of us goes for life insurance policies. No matter which insurance you choose, there is one term that is always associated with it and i.e. term insurance. It is often seen that the insurer do not understand this term properly. This articles is to make you understand what exactly the term insurance means.

What Is Term Life Insurance?

The name says it all. Term insurance provides the coverage for a certain period of time, which will be specified in the policy. The insurer can choose this in the beginning. The coverage for a certain period of time would mean that the death benefit will be applicable only if you die within the term mentioned in your policy. For example, if you choose insurance with a term of 20 years, then the death benefit will give to your nominee only if you die within those 20 years. If you die even after a day of 20 years, there will be no benefit but definitely a certain amount which is greater than the sum of the premiums paid by you is paid. Even though there is this disadvantage associated with term insurance policies, lot of people choose these policies as the premium every term would be very less. On the other hand there is a whole life insurance policy which will not have any term or which allow you the benefit for your life time.

Characteristics Of Term Insurance Policies
Most of the term insurance policies are renewable. This means that you will be allowed to reinstate the policy once the term ends. But reinstatement may be contingent only on passing certain medical exams and also this will likely result in an increased premium. General information which is given by the I.I.I. reports is that most of the insurers will not renew a policy which ends after 80 years of age. The premiums for the term insurance policies are usually decided based on your age and also the health status at the time the policy is done. The premium can also be in two ways: changes every year or it remains constant every year. Make sure you choose the right type of premium based on your financial conditions.

Since you now have a proper understanding of the term insurance take a wise decision when you look for insurance.