Term Insurance, Key points about Term Insurance

Term Insurance

Term Insurance is designed to provide financial protection to your beneficiaries in the event of your death during the term of the policy.

Key points about Term Insurance :
1. Duration:

Term insurance policies are typically available for terms ranging from 5 to 30 years, although some insurers offer terms of up to 40 or even 50 years.

Once the term ends, coverage ceases unless the policyholder renews the policy or converts it to a permanent life insurances policy.

2. Death Benefit:

If the insured person dies during the term of the policy, the insurances company pays out a death benefit to the designated beneficiaries.

This benefit is usually paid out as a lump sum, although some policies may offer other payout options.

3. Affordability:

Term insurance is often more affordable than permanent life insurances, especially in the early years of the policy. This is because term policies do not have a cash value component like permanent policies do, and they are designed to provide pure death benefit coverage.

4. Renewability and Convertibility:

Many term insurances policies offer the option to renew the policy at the end of the term, typically at a higher premium.

Some policies also include a conversion option, allowing the policyholder to convert the term policy into a permanent life insurances policy without undergoing a medical exam.