Term Life Insurance & its Advantages
Life insurance reduce risks for our loved ones. Life insurances ensure the safety and security of our family members in uncertain situations like death. Life insurances are of various types:
- Term life insurance
- Permanent life insurance
- Whole life insurance
- Universal life insurance
- Variable life insurance
- Variable universal life insurance
- Simplified issue life insurance
- Guaranteed issue life insurance
Each type of life insurance has its own features, benefits, and disadvantages. In this article, we will share with you what is term life insurance and what are its benefits.
What is Term Life Insurance?
Basically, the purpose of buying a life insurance policy is to replace your income (in case of death) so that family members can pay off debts and maintain their living. By paying the monthly premium for the term life insurance, the insurance company promises to pay the amount to the beneficiaries if you die.
Unlike Whole life insurance, the term life insurance does not have a savings component. However, the premium in whole life insurance is higher than the term life insurance. Also, the death benefits included in the term life insurance are higher as compared to whole life insurance.
Advantages of Term Life Insurance
Here are some advantages of Term Life Insurances:
- Less Expensive
The best thing about term life insurance is they are less expensive as compared to other life insurance types like Whole life insurance. Whole life insurance does have savings benefit but they have a high premium amount and the very low coverage amount. But, in term life insurance, you have to pay less premium amount and you get high coverage.
Term life insurance plans are really flexible. When you opt for term life insurance, you have many options available. It doesn’t matter whether you need a short term life insurance plan or a long term life insurance plan, you can get it. You can get a term life insurance plan for 1, 5, 10, 15, 20 or 30 years.
Term life insurance is a good choice when you need insurance for a specific length. You may want to insure SBA loans, mortgage, or children’s education. For all these purposes, you can get a good plan with term life insurance.
- High coverage
With less expense in the term life insurance, you also get a high coverage amount. Whole life insurance policies have high premium amounts to pay and very less coverage amount. Hence, if you are looking for a type of insurance that can provide high coverage amount at minimum expense, then term life insurance is for you.
A term life insurance can benefit you in so many ways. One reason why many people prefer whole life insurance plans over term life insurance plans is that whole life insurance plans pay on the death and you can borrow against any cash value. We recommend term life insurance because it has less cost and it provides a high coverage amount. And, it is also flexible and easy to understand.