Term Life Insurance - An Overview

A lot of people do not feel the need to purchase life insurance policy. What they fail to understand is that to purchase life insurance is not a liability, but an asset for your family after you are gone. The fact is that all of us need life insurance protection for some or the other reason.

Whether you are single or married, with or without dependents, a life insurance policy is necessary to avoid any kind of financial hardship that might come your way. Needs may differ but the whole purpose of buying a life insurance policy remains the same – protection in times of crisis.

Term life insurance and whole life insurance are the two major types of life insurance. Out of these two, term life insurance offers low-priced life insurance. It is particularly for those who cannot afford to shell out higher premiums.

Term Life Insurance

A life insurance policy that offers coverage for a limited period of time is referred to as term life insurance. The term can be of one year, 5, 10, 15, and 20 years. If the policyholder dies during the term, the beneficiary is paid out a death benefit. But, if the death occurs after the term, he/she will not receive any coverage amount.

When you purchase life insurance policy, you are asked to name a nominee or beneficiary. This person is entitled for the death benefit after your demise. Usually, a spouse is named as the main beneficiary, but it is entirely up to the policyholder to select his beneficiary. Some people choose to leave their inheritance for charities.

One of the major drawbacks of term life insurance is that as you age, the premium amount keeps increasing. Unlike whole life insurance, you cannot carry on with your policy irrespective of your age. Also, there's no cash value in term life insurance. Your family gets paid only if you die before the term expires. Otherwise, you do not get even a single penny.

Why Buy Term Life Insurance?

Purchase life insurance for it is the perfect solution to safeguard your family and loved ones against any kind of financial crisis that may arise after the death of the primary bread-earner. We all know what it feels like when the main bread earner of the family passes away. Other than the emotional trauma, the family has to think about their survival. This is where term life insurance coverage comes in. The death claim paid out to the family helps to sort out their financial needs. It covers everything, ranging from living expenses, to providing funds for kids' college education, paying off mortgage, etc.

Some employers provide their employees with a life insurance policy, but that doesn’t cover the whole family and is usually not enough. Therefore, it is better to purchase life insurance policy separately that can take care of your family needs when you are no longer there.

Even after you are gone, your family members will remember you and appreciate that you did purchase life insurance policy. And your soul will rest in peace thinking that your loved ones are secure.