It is never easy, for anyone to contemplate their mortality, it’s a terrifying thought, something no one should ever have to imagine. Unfortunately, it is a fact of life, more so if you have a young family that is dependent on you. It is for this reason that many people take out life insurance. There is a cover that comes highly recommended just for this specific type of scenario-Term Insurance.
What is Term Insurance?
In the simplest of terms, Term Life Insurance refers to a policy that safeguards your family’s needs in the event of either uncertainty or death, and it acts as kind of a fail-safe system that ensures your family is well taken care of. As mentioned earlier, the main aim of Term Insurance is to provide cover for your family when they are at their most vulnerable, when in case of death, the devastation would be both psychological and financial.
Term Insurance covers are inherently cheaper than your run of the mill life insurance policies, and they offer policy covers that last anything from a year to 30 years. Many insurance companies that offer this kind of cover do however recommend 20 years, but a 30-year policy is still as efficient.
Key Features of Term Insurance
First, unlike other types of life insurance, term policies use the entire premium you pay to service the policy’s risk. This means that none of the money you pay as premium services any kind of 3rd party investments. What this means essentially, is that in the entire death benefit will be handed to your family in the event of your demise. The good thing about this is the fact that it significantly reduces the amount of premium you pay, making it affordable even on minimum wage.
Another key feature is the fact that premiums do vary depending both on the policy provider and the period you are insured for. A 30-year term plan will thus have a higher premium compared to one insured for 20 years.
Additionally, as long as you’re 18 years old, you qualify for this type of insurance cover, and it goes all the way to 65, which is pretty inclusive. Also, aside from being very affordable, Term insurance from reputable companies is fitted with a versatile payment plan that can suit just about anyone.
The payment plans and the premiums are all designed to provide convenience for any type of financial situation, meaning you don’t have to worry about the payment plan giving you a hard time.
Why You Need It
The single most important value a term insurance policies give you is ensuring your family lives in comfort after you’re gone. This means everything from school fees for the kids, mortgage payments, and any of the various needs that are crucial to safeguarding their quality of life.
There are a lot of things that need to be factored in if you want to ensure your family doesn’t get left out in the cold. This is why you need to consult your insurance company before you commit and get a rough estimate of what will constitute a comfortable life for your family.
You also need to understand, that unlike other forms of life insurance policies with saving and investment options, Term Insurance policies are the only ones that guarantee your family’s financial security once you are gone. What this means is, you get a guaranteed large some from a low premium with no loopholes.
So if you are genuinely looking to secure your family’s financial future, then you ought to give priority to term policies as opposed to other kinds of policies. This is the most recommended consideration.
The only notable pitfall on term policies is the fact that there is no maturity benefit attached. The benefit is the value of the premium, and it is paid out, in its entirety to the beneficiary in the event of the insured’s demise.
In principle, most people try to kill two birds with one stone. They want a comprehensive life insurance cover that also yields some kind of return on investment. The problem with this kind of plan, is it splits your premiums, making your cover incomplete.
The reason term insurance comes highly recommended is the fact that all your contributions are tied to your family’s future financial security, so you don’t have to worry about their wellbeing when you are gone.