In a term life insurance, coverage is provided for a particular term only, hence the name. A particular amount has to be paid at regular intervals, which is known as premium. In case the insured person dies within the specified term in the insurance policy, then the beneficiary is entitled to the benefit amount. Amount received by the beneficiary is not taxable. Benefit is obtained by the nominee only if the insured loses his life during the specified term. There exists no facility to surrender the policy and withdraw cash.
Most of the insurance policies are more expensive as compared to this one. At the time of death, monetary compensation is received, which proves to be very beneficial in case of families who need the compensation for their survival. Depending on your choice you could choose from the level term insurance policy, renewable term life insurance policy, increasing or decreasing term insurance policy, group term and/or convertible life insurance policy. Each of these policies has their own benefits, so it is best to talk to the insurance agent about your needs first and accordingly decide which could be the best option for you.
Life insurance is categorized into permanent and term insurance policies. In the former, basically there are three parties involved who come into a contract with each other. One is the insurance company, the second is the owner of the policy and the third is the person who is insured. The person who pays the premium on the policy is basically the owner of the policy. Almost every individual needs to obtain such a basic policy to secure his or her financial future.
In case you do not have sufficient income then considering this policy is the best option. In comparison to the permanent life insurance policy, this particular policy attracts lower premium. There is always the worry about welfare of children and spouse after the death of an individual. Many people buy homes on loan and mortgage, and such incurred paybacks can be cleared with the amount received from the policy in case of death within the time period specified. The provision is to ensure that survivors are well taken care of and your capacity to earn and contribute to the fund is valued at the end of the term. Amidst the chaotic and unpredictable environments we operate within, this kind of assurance is a godsend.