Importance of Term Life Insurance Over Other Insurance Coverage
By Angela Sanders Friday, August 23, 2013, 06:45 AM EDT
Buying insurance policies can be very confusing! Whether you go for a term life insurance or whole life insurance, the main motive of buying insurance coverage is ensuring the protection of your family.
Understanding the Nitty-Gritty
Various forms and procedures for buying any insurance product are almost similar, but you need to be careful because the policy terms and coverage differs from one policy to another. It’s always advisable to know each detail about the policy you are buying. You cannot just randomly pick an insurance coverage of any amount. There are many calculations and logical reasoning behind taking a suitable coverage.
Understanding Term Life Insurance
Term life insurance, as the name suggests, is taken for a specific time frame. This insurance will cover your risk for a limited period only for which coverage has been taken. But you can renew the policy after the term is completed in case you want to continue. Renewal premium amount will not be the same as your previous premiums paid, butrather it will be higher.
The main benefitin case of term insurance coverage is that if the policy holder dies within the term insurance period then the family/nominee will get the full insured amount. After the term insurance expires, no amount can be claimed from the insurance companies. This is the only reason people do not prefer term insurance. However, it is a very wrong way of interpreting any insurance policy.
Insurance Must Not be Seen as an Investment!
People always look at insurance as investment and expect returns. Insurance should be taken for the security of the family. The sole intention should be that family would be able to maintain the same lifestyle without suffering any financial crisis in case of an untimely death of the breadwinner.
For Those Who Needs Returns
If you are really looking for returns, then consider investing in mutual funds and other investment products that can yield good return on investment. You cannot expect return from insurance policy, while also having full security of the family. The main advantage that term life cover has over any other insurance policy is its fairly low premium. The premiums can be as low as 10 times when compared to other whole life covers and policies. The early you start, lower will be the premium amount and it remains the same for that specific term. There is no return or cash-back terms attached to term insurance; this is the reason the premiums are lowest in this case.
In a Nutshell
The insurance quotes for term life policy coverage depend upon lot of things like your income, lifestyle, expenditure, inflation, and commitments. The amount of cover you would like to take will be based on these things. Every person must have a term cover to protect the interest of his or her family, especially if you are the only earning member.
There are a lot of risks, and with a good term cover, you can enjoy complete peace of mind about the well being of your family even when you are not there to take care of them. Almost all insurance companies offer term life insurance, so finding one should not be a problem.