Term Life Insurance offers insurance
policy for a particular time period as you settle a set month to month or
yearly payment. Once the time period mentioned in the coverage expires, the
premium payments will stop and definitely the protection stops also. During the
coverage timeframe, if the insured individual passes away, the death benefit is
paid out to the inheritor.
Term Life Insurance works exactly the same way as many other kinds of insurance coverage and that it pays the claims mentioned in the agreement presented the payments are updated and is still inside the policy timeframe. And once the coverage ends, not only will the benefit cease, there's no return on the premium paid.
The same can be said for a house insurance for example. You pay an annual premium to get your house and its content covered for a year for possible loss due to fire, burglary, etc. At the end of the policy period, whether or not you have used any of the benefits of the insurance or you have sold the property before the policy expires, you will not get your money back.
Term Life Insurance, how is it different then? In comparison to a whole life insurance or what they also refer to as a long term life insurance, it's totally much less costly. One reason is the life span of the policy period. If term life offers protection for a certain period of time, whole life insurance ensures protection for the life span of the insured individual.
Unlike term insurance, if the owner of a permanent life policy wishes to withdraw from the contract at any point in time, he will receive a predetermined cash value depending on the age of the policy at the time of withdrawal. Also, upon death of the policy owner, the beneficiary receives the face value of the insurance, not just the cash value at the time of death.
Another major difference is that, term life insurance is what they call a pure death benefit. This means that its main purpose is to have something to leave to the beneficiary in case of death of the policy holder while the contract is still up to date. The benefit could help cover costs such as funeral expenses, education for dependents, debts and the like, most especially if the insured is the breadwinner of the family.
Its primary use is to give protection to whatever obligations the policy owner will be left behind. One disadvantage to this form of insurance policy is that, at the end of the term, in case the person still needs to go on with the coverage, he will not be provided the same payment as the old one. This adds up to the risks of buying one.
Lots of people are torn between Term Life Insurance and whole life insurance, what kind to buy for themselves. Some professionals would advise to pick term life so as to settle immediate expenses until such time that the policy owner is able to get enough or adequate funds from savings or retirement as a way to offer economic safety to the household.
Therefore, you may choose to purchase a term life insurance and invest the remainder elsewhere or obtain yourself a whole life insurance since it is in itself a good investment, it's all your decision.
Term Life Insurance works exactly the same way as many other kinds of insurance coverage and that it pays the claims mentioned in the agreement presented the payments are updated and is still inside the policy timeframe. And once the coverage ends, not only will the benefit cease, there's no return on the premium paid.
The same can be said for a house insurance for example. You pay an annual premium to get your house and its content covered for a year for possible loss due to fire, burglary, etc. At the end of the policy period, whether or not you have used any of the benefits of the insurance or you have sold the property before the policy expires, you will not get your money back.
Term Life Insurance, how is it different then? In comparison to a whole life insurance or what they also refer to as a long term life insurance, it's totally much less costly. One reason is the life span of the policy period. If term life offers protection for a certain period of time, whole life insurance ensures protection for the life span of the insured individual.
Unlike term insurance, if the owner of a permanent life policy wishes to withdraw from the contract at any point in time, he will receive a predetermined cash value depending on the age of the policy at the time of withdrawal. Also, upon death of the policy owner, the beneficiary receives the face value of the insurance, not just the cash value at the time of death.
Another major difference is that, term life insurance is what they call a pure death benefit. This means that its main purpose is to have something to leave to the beneficiary in case of death of the policy holder while the contract is still up to date. The benefit could help cover costs such as funeral expenses, education for dependents, debts and the like, most especially if the insured is the breadwinner of the family.
Its primary use is to give protection to whatever obligations the policy owner will be left behind. One disadvantage to this form of insurance policy is that, at the end of the term, in case the person still needs to go on with the coverage, he will not be provided the same payment as the old one. This adds up to the risks of buying one.
Lots of people are torn between Term Life Insurance and whole life insurance, what kind to buy for themselves. Some professionals would advise to pick term life so as to settle immediate expenses until such time that the policy owner is able to get enough or adequate funds from savings or retirement as a way to offer economic safety to the household.
Therefore, you may choose to purchase a term life insurance and invest the remainder elsewhere or obtain yourself a whole life insurance since it is in itself a good investment, it's all your decision.
By Lois Kellam
0 comments:
Post a Comment