Define Term Life Insurance
To define term life insurance is just like buying life insurance for the purpose of coverage only because it is like most of the general insurance or medical insurance, the premiums the buyer paid will not be refunded
Term life insurance offers the cheapest premium and is the most original life insurance; it provides the insured coverage for a limited period of time or term. To define term life insurance, as the name implies, term means a specific time or stated period of time.
When purchasing a life insurance, the buyer will specify how long he wants to be insured, it can be 1 year, 10 years or up to as long as 30 years, and this period of time specified is called term. The buyer will then sign a contract with the insurance company, this contract is called policy, the conditions and the premium and the amount insured is legally stated, once it is accepted and signed the policy is then in effect. The buyer will be referred as policy holder or insured; the person who in future receives the proceeds is called the beneficiary. The beneficiary can be one person or more, and is changeable in future, up to the buyer’s discretion.
Within the bound period of time, if the insured died of accident or any other mishap, the insurance company will have to compensate the beneficiary. The compensation will be made according to the amount specified in the policy, it ranges from as low as $20 thousand to $100 thousand or more, of course, it depends on the buyer, the higher the coverage the higher the premium.
To define term life insurance is just like buying life insurance for the purpose of coverage only because it is like most of the general insurance or medical insurance, the premiums the buyer paid will not be refunded, because this policy carries no cash value. It is different from whole life insurance whereby this life insurance can have accrued cash value. Whole life insurance is like a saving account, the buyer can withdraw money if he wants to, but the premium of this policy is definitely than term life. Of course, we can’t have a peace of cake and eat it too.
For those who have large responsibilities, term life is one of the most recommended, because it has more coverage but low premium. Imagine if only a pair of hands are working and he has many mouths to feed, and has not much money to pay for the premiums but want to have more coverage, perhaps term life is the most affordable policy.
To define term life insurance, the reliable and experienced life insurance agents can provide the customers with quotes that meet their budget. The customer may enquire for a more detailed explanation, how much coverage can the policy provides and make a comparison to other types of policy before he buys.
