Term life insurance is a popular type of life cover, which is prevalent in every country. Specifically, in United States people choose term life insurance policies over permanent life insurance policies because, they are advocated as in inexpensive plans. In reality though inexpensive; they have both pros and cons with pros weighing down cons. The never-ending debate on which is better could confuse a potential buyer. Term life insurance as the name suggest, was designed for life coverage, whereas, permanent life insurance on the other hand, was designed a as a combination product that provide both investment and coverage option.
In this policy the insured is covered till the term ends or one dies. In case no death occurs or the term ends, policy becomes null and void, unless it is renewed. Even renewal is not guaranteed because; in the longer tenure policies, based on the current age and medical conditions might require a hike in premium or sometimes even the policy might be denied. Most people worry that this type of insurance policy does not return any money. But one should understand that term life insurance should be considered only as a financial security measure in case of a mishap and not a savings or investment option.
In this article, let us discuss why it is important to buy at least one term life insurance policy for an individual.
- Taking into account the pre-and post-death obligations, one should not burden the family after demise. The sum assured we’ll cover the financial obligations to a certain extent.
- Widowed spouse or children who live on Social Security benefits will also have extra cash to run the family without lowering the standard of living drastically.
- Protection and savings habit can be inculcated in children as life insurance is cheaper at a younger age.
- Helps take care of tax
- As the policy is simple and straightforward it is easy to understand and take an informed decision.
- Specific terms based on the need and affordability can be selected.
Once the decision to buy term life insurance policy has been taken, you should start looking for deal that has good coverage, but at the same time comes with cheap premium. The idea should be to ensure a comfortable future for your family and loved ones in case of a mishap as the aim is to ensure their financial security.
