Life insurance is a policy between two parties, which include the insurance holder and the insurer or the provider of the lump sum. In order for the holder to get a lump sum in the future, there must be a premium to be paid, which may be exempted from tax or not. In addition to this, there are two types of life insurance policies, one for protection and another of investment. If you only for the protection of your family, you may then settle with the term life insurance policy first.
What Is Term Life Insurance Policy?
The policy is a type of life insurance plan, which provides temporary protection to you and your family for a certain period of time. Specifically, you will be coordinating with the insurance holder to determine until when the coverage will be active. If you will pass away during the time period of the policy and it is still active, a death benefit will be provided in return. In contrast, term life insurance is much cheaper compared to whole life insurance policy. In addition to this, take note that term life insurance has no cash value.
The Concept of Term Life Insurance
The term level policies have premiums that will remain consistent throughout the period of the coverage. In other words, preparing for payments will be easier. Other than that, the level of premium you have to pay for depends on how long the policy should remain active. For instance, if you opted for a longer policy, you will be required to pay for a higher premium. The levels of term level policy may be for a decade, two decades, or even three decades, which is why term life insurance policy is also known as level term policy.
The Difference of Term Life Insurance to Perm Life Insurance
The main difference between the two insurance policies is that term life insurance policy is for temporary protection of your family, while perm life insurance is for a lifetime. Your premiums with term policy will stay for a given period, for instance 20 years. On the other hand, permanent life insurance is designed to exist until you pass away. More premiums will be charged to you since paying a death benefit will also be included in the plan. Other than that, most whole life policies are designated for future savings or investment, which is why taxes are expected to be encountered.
Renewability of Term Life Insurance
Term life insurance is also highly beneficial in terms of being renewed easily once the agreement ends. You can extend the life of the policy if you think you or your family still needs financial support. During the renewal, there will be no medical examination to be conducted. But as advised, you should still take physical for the annual amount you will get will be greatly based on your current health.
Convertibility of Term Life Insurance
Other than being renewed, you may also convert term life insurance policy so that you can get permanent life insurance in return. There is no needed medical exam or underwriting for this matter. You may opt for health-concerned life insurance or you may secure your coverage based on your current need. https://www.terminsurancequotesuk.co.uk