Term life insurance provides coverage at a fixed premium rate for a limited period of time. This life policy usually offers a death benefit only. In order to qualify for compensation, the policyholder must die within the specified term of the policy. If the beneficiary outlives the contract, it expires and has to be renewed. A term life insurance can be terminated as well if the policyholder defaults on monthly premiums.
Terms for this type of insurance policy can last anywhere between ten to thirty years. However, contracts usually vary and some may be valid for just one year, while others can be as long as forty years. Insurance premiums for this life insurance policy depend on several factors. These include aspects such as age, health status, and if the applicant engages in habits that jeopardize health or general wellbeing.
If you are considering taking out a term life insurance cover, you must be wondering, what benefits does this policy provide? Are there any shortcomings associated with it? To find answers to these questions, read on.
Advantages of Term Insurance
Besides being conversant with the advantages of term life insurance, it is equally important to know about the dark sides that come with this insurance policy. So, let’s have a look at the disadvantages of term insurance as well.
Disadvantages of Term Insurance
Keep in mind that polices for term life insurance are not the same. Since different providers have varying terms and conditions, make sure to read the fine print before putting your signature on the dotted line. In addition, get and compare quotes from various providers in order to find the best premium rates.
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