Term life insurance
Many people choose term life insurance rather than whole life insurance, or permanent insurance. Term insurance provides coverage for a relevant term or limited amount of time. Since term life insurance builds no cash value, it is not considered to be a significant investment for retirement purposes or financial planning.
Once the term life insurance period lapses, you can decide to either continue with it by paying annually, an increased premium or end it. Most term life insurance policies cover a period of 10 to 25 years. Customized policies can also be written for individuals, if required. Upon death of the individual, the beneficiary will get the money.
Term life insurance is usually taken out as it is affordable to purchase a considerable death benefit in which you pay for coverage on a per premium basis. It works like all other policies where you pay monthly or quarterly premiums in exchange for coverage. As long as the premium payments regular and kept within the period of the policy, claims filed will be satisfied. It is important to remember that you will not get premium returns if you do not file a claim. Term life insurance is used as risk protection for your dependents.
Term life insurance is ideal for a family who is living on a budget and needs temporary life insurance protection. This type of insurance can be purchased in large amounts at very low premiums, and hence is very affordable.