What is Term Life Insurance?

Talking about term life insurance makes people very morbid, especially those individuals that are approaching middle-age.

But death is a reality no-one can avoid. Taking care of  your financial responsibilities now, by making provision for them when you are gone, is actually a satisfying and loving exercise.

However, not all people are able to afford the relatively expensive premiums associated with life insurance. This is especially true for the lower income groups and young married couples with small children.

Term Life Insurance isn’t complicated to understand. Term insurance is the original life insurance of many years ago, and only insures you for a set period of time, while you need it.

 

How does Term Life Insurance work?

• you buy a policy for a pre-determined set time, during which time, if you pass away, your family will receive a lump-sum benefit.
• you will pay for this cover by paying the applicable, inexpensive monthly premiums.
• the set period may be 10,15, 20, or 30 years, depending on what expense or loan you want to cover in the event of your untimely death.
• once the set period expires, the policy ends. You may not continue with the same premiums and same cover as before,if you decide you want to continue.
• different conditions apply and new premiums.

 

How to calculate your term life benefit amount

• estimate your family’s monthly expenses after your death.
• include any loan accounts, fees for education, and other major expenses they may incur.
• add all these amounts together, and then add another amount as an additional lump sum.
• your premiums will be calculated according to this total amount.

 

Advantages of Term Life Insurance

• it’s less expensive, especially for those low-income groups, who still want to care for their families  if they pass away unexpectedly.
• it is a more flexible way of insuring yourself for a set period of time only.
• also good for young families who are not earning much, but are repaying several loans. This will give peace of mind in the event of your untimely death.
• it is a simple, uncomplicated insurance to understand.

 

More information concerning Term Life Insurance

Term life insurance premiums are lower than those of whole life insurance, for the same benefit amount. You may take out term insurance, and then renew it annually. The only drawback here is that your health may deteriorate suddenly, making renewal out of the question as you become un-insurable.
With term life you can keep your premiums the same for the duration of your contract. This is called level term life insurance.  Some financial service providers offer a return of the premiums you’ve paid if you outlive the duration of the term life insurance.

Other things worth knowing about term life insurance –

• the death benefit is tax-free.
• the cover ceases to exist once the term is over.
• if the insured dies before the term ends, the policy will pay out to the beneficiary.
• you can easily change to cash-value whole life insurance if your needs change, but your health remains good.
• premiums depend on your age, your health, and your lifestyle.

Use this list of life insurance companies to investigate various offers.

Remember, if at any time you stop paying your premiums, your insurance cover will also stop.

To get a FREE term life insurance quote, please complete and send the form on this page

 

 

 

All info was correct at time of publishing