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What are the frequently asked questions about term life insurance?

Thursday, April 19th, 2012

There are certain questions that tend to creep into the mind of a customer before buying a particular policy. Some of these frequently asked questions can well be answered to provide the individual with some collective information regarding the Term Life Insurance. The questions asked can vary from person to person or at times can vary from one policy to the other. However some of the frequently asked questions that generally tend to come forth are answered in this article.

What are Term Life Insurance & the premium increment policy?

This type of policies provides the individual coverage with a fixed premium within a predefined or demarcated period of time. These types of Term Life Insurance are one of the less costly insurance & are pretty simple to buy & get used to. The policy involved in this does not entertain any cash build up feature & also it is a non participating type of insurance policy. The premium of the insurance increases as the insurer grows which would increase on renewal of the same. As for example an annual term policy would increase the premium carried every year. On the other hand a policy bought on a five year long term allows the increment in premium rates to take effect after five long years.

When the policy matures & receiving money when the policy expires or is in any case terminated?

The policy as a matter of fact would never mature rather it will simply expire on its stipulated date. On self termination of the policy the individual would not be awarded with any money since the policy does not carry with it cash build up features. Also the expiration of the policy will not provide the insurer with any money back if the insurance bought is of an ordinary Term Life type. Recent developments in the insurance policies have brought such features which allows the policy holder to get a payout cash exactly same as he invested on purchase of certain high valued products from those upgraded companies providing those policies.

Whether the individual will have to go for a medical test prior to the buying & whether the death benefit included in the policy is tax free?

Answers to both of these questions are a loud yes. The insurer or the policy holder will definitely have to pass the medical examination prior to the buying of a term Life Insurance Policy & tax is not imposed on the amount compensated as death benefit.

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