Term Insurance

Term Insurance are basically life insurances for specified time frame or terms. This is actually an insurance which insures the life of the insured person for a definite maturity period.

Term Insurance is a insurance of temporary nature where it is particularly designed for limited budgets and hence are simplest to be dealt with. This insurance type can be initiated with comparative low premium amount.

Term Insurance are meant for accomplishing the short term objectives of life such as :-

(a) In order to pay-off any loan amount many people go for the Term Insurance policy which have a short-term nature
(b) During the time when the parents bring up their child, they always want a better life and education for their next generation. Hence in such a delicate period of time many parents seek for term loans for a particular period of time.

In USA, these term insurance policies are applicable for variable years ranging from 5 to 30 years. This term insurance can be renewed continually up to the maximum age limit of 85. In some provinces it may be 80 years or 95 years but everything is dependent on the policy/contract of the Term Insurance.

Some of the glaring characteristic features of the Term Insurance are :-

  • Premium Rates
    The premium paid by the insured persons to the insurers are subjected to fluctuation based on the fluctuations in earnings from investments, associated expenses, etc. But the premium cannot cross a maximum limit, set by the contract, at any consequence.
  • Renewal specifications
    The term insurance could be renewed after every maturity, but the premium amount increases with every renewal because with increasing age the risk of death of the person also increases. Hence concurrently the premium amount also increases with every renewal of the term insurance policy.
  • Term Insurance gives an incentive to its policy holders for converting their term insurance policies to the permanent ones. This is a unique option which are offered to the policy holders by the insurance issuing companies during any time of the life of the insurance policy.

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