With different types of life insurance policies available in the marketplace, it’s natural for buyers to get confused with regards to which one to invest in. Some life insurance plans are for specific terms only. These plans are referred to as term insurance plans and they feature several benefits. If you are in the process of freezing your buy upon the best term insurance then this article will guide you with your purchase. Read on to understand the key attributes of a term life insurance plan and why you should consider buying it at the earliest.
What is Term Life Insurance?
Term life insurance refers to a specific kind of life insurance policy that’s valid for a pre-defined period only. In general, it covers the life of the insured for a “term” of years such as 10 years, 15 years, and so forth. The death benefits will be paid by the term insurance company to the family of the deceased only if the insured dies during the time in which the policy is active.
As far as the costs are concerned, a term insurance policy is less costly in comparison to permanent life insurance. There are no maturity benefits or cash value linked with term plans. In other words, unlike the permanent life coverage plans, guaranteed death benefit is the only value that can be derived from this type of policy. You may want to know more about the best term insurance plans at https://simplelifeinsure.com/best-term-life-insurance-companies/ and their features before shortlisting the ones that match up to you short and long-term needs.
Term Insurance – An Overview
Term insurance plans can be availed at different levels of premium for specified policy terms, such as 10, 20, 30 years, or so forth. Such policies are labeled as level term” plans. The premium is calculated as a fixed and specific cost, usually every month. This premium amount is in place of the benefits combined with the term insurance policy. You may be wondering how the insurance premium is calculated. A term insurance company will ascertain the premium applicable to your plan after taking your age, health, and life expectancy into consideration. A medical examination may be required for reviewing the family medical history and your health condition. It is important to note that the term insurance requirements would differ from one company to another and would be dependent on the type of policy selected by you.
Term Insurance Plan Premium
The premium of a term insurance plan is predefined and has to be paid for the designated period. In case the insured (policyholder) passes away when the policy is active then the company providing the insurance will have to pay the policyholder from the policy’s face value. However, if the policyholder dies after the policy term ends then no payout or coverage will be provided to the family of the policyholder. It is possible to renew or extend the term insurance. The premium for the renewed or extended-term insurance plan would be guided by the health and age of the policyholder at the time of the plan being renewed/ extended.
Resultantly, the premiums of the extended or renewed policy would be higher than that of the original term insurance policy, which was probably purchased when the policyholder was younger or in a better state of health. The range of the term insurance plan would vary in line with the amount of payout in the reckoning and the age of the policyholder. For instance, a term plan taken for 30-years and has a payout of $250,000 (say) can range from approximately $15 per month for someone in his twenties. In case the policyholder is in her fifties then the premium may amount to $60 per month or so.
As you look around for the best term insurance premium rates, you’ll find different insurance companies having different premium rates in line with the health, age, smoking history, and other attributes of the policyholder.
Buy a Term Insurance Plan Today
Buying a term insurance plan will give you coverage for a specific period or “term” of years. It is important to ascertain your insurance coverage needs and budget before comparing different plans. It pays to reach out to experts in the world of term insurance to understand the nuances and benefits of different plans. Once you are sure of the type of term insurance plan that you’d like to invest in, get ready to provide a bigger umbrella of protection to your family – with or without you being present to fend for them.