Wednesday, 27 July 2016

Brief Introduction into Term Insurance

These are basically the two types of life insurance. The type you choose is totally up to you. Just like the name implies, Term insurance is bought to provide a temporary death protection benefit. Permanent insurance on the other hand is designed to provide protection for the entire life of the policyholder. As you may have rightly guessed, Permanent insurance is more expensive than buying Term insurance.  

If you have your children as your only dependents, then you may consider having a Term insurance. You could decide you want such insurance until all of them have graduated from college. In other words, you want the insurance policy to provide financial assistance to ensure all your children finish college, even if you pass away. Similar reasons like this are the reasons people settle for Term insurance.

A Term insurance can be canceled by the insurer only when the policyholder fails to pay premium for it. Usually most insurers give a 21 day grace period from the last due date for premium payment. If the policyholder is able to make payment before the expiration of the grace period, the Term insurance is still in effect. If the grace period expires, then policy is automatically canceled.

Whether the premium rate will change over time can only be determined by the kind of Term insurance you bought. Usually Term insurance policy is categorized into Level or Increasing policy when it comes to premiums. It is best you fully understand all that pertains to the policy before settling to buy it.

No comments:

Post a Comment