Term Life Insurance

Types of life insurance 89z89377

There are different insurance policies, and term life is one of them. Term life insurance is the easiest and surest type of insurance – the death benefit that the heirs of a policyholder take throughout a given period. 

Let’s explain further; when you purchase a term life insurance policy, the insurance company decides your premium based on the insurance policy value and your gender, health, and age. 

In some circumstances, smoking status, medical exam, Driving record, Occupation, hobbies, and current medications must be made available. If the individual dies during the policy duration, the insurer will pay their beneficiaries the payout amount. 

The amount your beneficiaries get is not taxable; they will use it to settle your funeral cost, mortgage debt, and consumer debt, amongst others. 

Once the term life insurance policy expires before death, no payout is guaranteed. On the brighter side, you can renew when it expires, but the policy premiums will be recalculated based on your age when you go to renew. 

Benefits Of Term Life Insurance

1) It Is Affordable: Many people think term life insurance is expensive, but it is not. It offers extensive coverage at a friendly rate. The premium for term life insurance starts as low as 0.1% of the overall insured sum. 

2) Simplicity: Understanding life insurance might be complicated therefore making it difficult for people to understand and buy the coverage.  

Permanent life insurance has some complicated features like market fluctuations, combined interest, and savings but the term life insurance policy is super easy to understand.

Simply put, it offers death benefits upon death within the policy term as long as the premium pays. 

3) Tax-Free Death Benefit: Upon death during the policy term, your family/beneficiaries will receive a considerable sum of money from the insurance company. 

The excellent aspect is that term life benefit payments are all tax-free, making your loved ones keep all the cash for themselves. 

Types Of Term Life Insurance

Term life insurance has three types you can easily choose from, they are;

1) Annual Renewable Plan: This plan ensures you renew your policy year-to-year without needing to take any medical exam. 

Nevertheless, your premium will keep increasing yearly while the policy remains stable. This type of insurance best suits short-term debts(personal and business loans), and the debts can be cleared in a year or two. 

2) Decreasing Term Plan: Throughout this policy term, all your benefits will decrease annually or monthly at a predetermined rate. 

As the death benefit goes down with time, your premiums will not change, making this type of term life insurance less affordable. It is the real option for your beneficiaries to clear off mortgages and loans. 

3) Level Term Plan: This is the most attractive option. This term plan allows your death benefit and premium to stay the same through the policy period. 

Although it is more expensive than other types of term life insurance, it is cost-effective in the long run and ideal if you want to pay for your family’s future and immediate expenses. 

On A Final Note;

Term life insurance offers various benefits that you’ll love. People with no plans for the future are always stranded. Owning a term life insurance policy will protect your loved ones and oversee their financial health. 

We at EMA Advisors will guide you through all you need to know about different coverage/policies that will boost your confidence and erase confusion.

You may be interested in: Your Guide to the Types of Life Insurance