Term Life Insurance – Live Insured

It is said, ‘Every day we live brings us closer to death’. Well… if that’s the case, why not ‘live insured’! Agreed, that the loss of life can never be compensated for; but, at least your dear ones will have something to fall back on once you are gone.

With life insurance companies offering a slew of policies and plans to ever-so-perplexed individuals, it often becomes exasperating to pick the right plan that suits your purpose. If you happen to be a middle-income level individual looking for a low-cost life insurance plan, Term Life Insurance is just the right choice for you.

Term Life Insurance is, as the name clearly suggests, insurance for a ‘term’. Often regarded as the purest form of insurance protection, this policy provides coverage for a limited period of time and is, invariably, the most inexpensive way of purchasing substantial death benefit on your coverage amount.

Term Life Insurance offers you the option of continuing or dropping the policy after the completion of your term. However, you ought to pay annually-increasing premiums in order to continue the coverage. In case of an insured’s death during the term, the death benefit is paid to the nominated beneficiary.

Unlike other permanent life insurance plans, Term Insurance does not build any cash value. Being a pure death benefit, it allows the insured to cover financial responsibilities such as consumer debts, education for dependents, etc.

Some of the most popular types of Term Life Insurance plans are listed here:

Renewable Term – Insured can renew this type of policy at the end of the term, without having to take a new physical exam to prove his/her insurability. However, your policy premium amount will keep increasing as you grow older, irrespective of the condition of your health.

Non-Convertible/Non-Renewable Term - This kind of policy expires at the end of the predefined term. It is less expensive in comparison to Renewable Term Insurance.

Convertible Term – At the end of your term, you have the option of converting your policy to the one with higher premium, such as Endowment or Whole Life Insurance.

Deposit Term – A ten-year renewable policy, Deposit Term demands a security deposit at the time of purchase. Your insurer will return the entire deposited amount, with interest, as long as you maintain the policy for at least ten years.

Re-Entry Term – The most inexpensive option in Term Life Insurances, this kind of policy allows you to purchase Re-Entry at select rates, which are usually cheaper than standard rates. However, the insured needs to undertake a physical exam to provide proof of his/her physical stability each time a term comes to an end.

Level Term - The face value and policy premium remains the same for the entire term of the policy.

Decreasing Term - The face value on this kind of policy goes down over time. Most insured use Decreasing Term policies to pay off mortgages.

Increasing Term – Mainly sold as a ‘rider’, Increasing Term policies are policies wherein the face value goes up on a regular basis every year.

Insured can choose from amongst various term options, which usually range between five and thirty years. It is always advisable to consult insurance experts before going ahead with signing a policy.