A Term Life Insurance Policy – Peace Of Mind At A Very Reasonable Cost
Posted on April 29th, 2009. Filed under: Insurance.Many people buy life insurance today but while many of us know about permanent or whole of life insurance a lot of people miss the value of arranging temporary life insurance such as a term life insurance plan.
A term life insurance plan is a temporary type of insurance that covers you for a specific period of time providing a designated benefit in the event of death for a set premium which is usually paid monthly, annually or as a single payment at the beginning of the insurance period. At the end of the agreed time the plan will simply lapse unless you purchase cover for an additional period of time.
As long as you keep a term life insurance policy in effect by paying your premiums as agreed under the contract the policy can give you very considerable protection for your loved ones at often extremely low cost and it is therefore an ideal type of life insurance for young families when fund are tight and you cannot afford the relatively high costs associated with traditional whole life plans. Indeed, many people are pleasantly surprised when they discover just how low a term life insurance quote can be.
A temporary life insurance plan is easy to understand there are essentially only 3 things that you need to pay attention to.
The first is the face amount of the policy which is the sum of money that the insurance company pays out to your next-of-kin or other nominated beneficiary in the event of your death. This sum is normally fixed at the outset of the contract although it can also automatically increase over time or be increased at your request with an associated rise in your premium.
The second is the premium which is merely the sum of money which you are required to pay generally once a month, annually or as a lump sum at the beginning of the contract in order to secure the pay out of the face amount in the event of death.
The third is the term which is the time period for which the insurer will provide cover. If death occurs during this period then the insurance company will pay the face amount of the policy but, if you outlive the term, the plan will lapse with no cash value.