Term Life Insurance

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Term insurance is often referred to as “pure insurance”. Once underwritten and your rate is set, you pay that premium for the term of insurance, typically 10, 15, 20 or 30 years. There are no other benefits except the death benefit. There is no possibility of growth, yet this temporary insurance gives people the chance to buy more insurance for their money. Often times these plans are use to cover a loan to take care of your family for a specific period of time. However, if you want to extend the term, the cost will increase significantly.

There are two ways an individual can take life insurance:

  • 1. By opting for a pure life cover, also known as term insurance
  • 2. By opting for a permanent life plan that provides a cash value component and coverage for your whole life.

Some of the key features that make term plans indispensable include:

1. Larger life cover

Since term life insurance plans are often offered at a lower cost initially, it is possible for an individual to purchase a larger death benefit for a short period of time.

2. Riders

The policyholder can attach riders to the term plan, thereby enhancing the benefits of the policy. Many policies come with riders such as waiver of premium for disability, convertibility, accelerated benefits or increased coverage for accidental death. The policyholder should select riders based on his specific needs to provide additional benefits that can be valuable.

3. Enhanced cover

Certain insurance companies offer the flexibility to enhance the life coverage during critical stages of the policyholder’s life. For instance, the policyholder may be permitted to increase life coverage by a certain amount at the time of marriage or having a child. This makes it possible for him to start with a modest plan and then enhance it as his responsibilities increase along with his ability to pay additional premium.

4. Innovative features

While insurance companies have been quick to innovate in general, they have been most innovative with regards term plans. For instance, companies have been quick and proactive in cutting premium rates even offering extra discounts to certain categories like non-smokers and healthy living. Under certain conditions purchasing a term life insurance plan can be done over the phone and without a medical exam.