After that period expires, coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments or conditions. If the insured dies during the term, the death benefit will be paid to the beneficiary.
Term insurance is the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.
Term life insurance is the original form of life insurance and can be contrasted to permanent life insurance such as whole life, universal life, and variable universal life, which guarantee coverage at fixed premiums for the lifetime of the covered individual. Term insurance is not generally used for estate planning needs or charitable giving strategies but is used for pure income replacement needs for an individual. Term insurance functions in a manner similar to most other types of insurance in that it satisfies claims against what is insured if the premiums are up to date and the contract has not expired, and does not provide for a return of premium dollars if no claims are filed.
Term insurance provides you with insurance shield for only a fixed period of time. It pays the sum assured only upon the death of the insured or if the insured becomes totally and permanently disabled (if this benefit is provided) during this period. There is no savings or investment feature, so there is no cash worth if the policy ends or is terminated prematurely. Term insurance costs less than whole life and endowment insurance policies for the same coverage.
What one needs is a simple plan tailored to meet your changing protection needs. So, it’s tremendously important to identify your needs as well as your financial stability before selecting a life insurance plan. An ideal plan is the one that is affordable and which safeguards your loved ones and yourself.