Advantages & Disadvantages Of Term Life Insurance

Advantages Disadvantages Insurance

Term life insurance provides coverage for a specific period or term (most often 1, 5, 10, 15 or 20 years). It is also called temporary insurance. If death occurs during the term, the policy pays cash benefits to the beneficiary. However, once the term is over, and if the policy is not renewed, the coverage ceases. If death occurs after that period, no cash benefits are paid out.

Term insurance is the easiest to understand and is the most straightforward type of life insurance. It is sometimes called “pure” insurance, because the policy has no financial investment value and most of your premium goes towards paying coverage, with only a small amount going to the insurance company’s expenses. If you are looking for the maximum amount of coverage, term life insurance is the best choice for you.

All term life insurance policies cover you for a certain period of time. The exact term for you depends on Jasa Backlink Murah, how many years before you retire, and many other factors. Many people want to know that they are insured until they are ready to retire. Many just want to have insurance until their youngest child graduates from college, and because of that they make sure their life insurance coverage covers the money to pay for all college fees.

Most experts agree that you should carry insurance at least until your youngest child is 18 years old. So if your child is now 3 years old, you will want to carry your insurance for at least 15 years. But that doesn’t mean you have to lock yourself in for 15 years. You can purchase a renewable annual policy and renew it for 14 consecutive years. You should compare the total cost of a renewable annual policy and a 15-year term policy, making adjustments for time and value for money, to determine the best value for you.

Advantages Of Term Life Insurance:

  • It pays a death benefit to the beneficiary you name.
  • It will cover your final expenses and provide a lump sum for your dependents.
  • It covers you for the full amount of life insurance you choose.
  • It can be convertible and renewable depending on the policy.
  • It gradually increases annual premium as you get older.
  • It traditionally works well to meet temporary insurance needs.

Disadvantages of Term Life Insurance:

  • It doesn’t provide a cash value account for some later point such as retirement.
  • It doesn’t provide you permanent life insurance protection.