Key Points to a Term Life Insurance Policy
The term life insurance policy offers coverage some like a whole life insurance policy and one can buy it much more cheaply. It is bought for a specified period of time. The person is covered at a fixed lump sum payable on death. There are companies that offer cheap term life without health checks or other kind of considerations that are required if trying to buy other types of health insurance.
Here are some key points to know about term life insurance policy:
- The premiums are usually fixed and stay the same for the entire term of the policy.
- Some policies have an indexed scale of how much the insured would collect upon death.
- Keeping the premiums to a manageable level is what makes it the most popular type sold.
- There are no hidden fees and the premiums are affordable.
- Coverage and cost are the most outstanding features.
There are reasons why term insurance is sold in different packages. Most have to do with the payout that the company would have to give. Other term insurance policies base their premiums on age and allow the insured to tell them about the condition of his health. People who need some kind of health insurance for other reasons than only death coverage choose term since it is easy to get and cheap. Other people choose term since it has as good a payout as a more expensive whole life insurance policy. Since it is bought to protect the family or the assets of the insured, buying an insurance policy that also acts as an investment is not really all that advantages.
Most people who need to buy don’t have a lot of money to spend on premiums. Those monthly or yearly premiums can take up a lot of a working person’s income. This kind of coverage has a face value that is what most people are concerned about. Getting a higher face value at a cheaper rate is what makes term life insurance the choice of most working people who need protection financially for their family or for their mortgage lender.
Another reason why term life insurance is most often picked is that it can be dropped without losing too much money. If one dropped a more expensive whole life policy or cashed it in, one would lose more money than one would lose by merely dropping a term insurance policy. The amount offered by a term life policy is as high as whole life insurance policies. Most policies don’t earn cash value but some do which makes it wise to read your policy and to have an agent explain it to you.