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Term insurance

Term insurance. How to ensure life?

Term insurance is a special type of policy. It covers a certain period of time. A person can buy this policy for some years and then prolong it if it is necessary. This can be called a «term». If a person dies when the coverage is active, relatives will get compensation. The sum depends on the type of policy.

This type of insurance is not the same as permanent life insurance. The only compensation that can be got according to this coverage is a death payment. In other cases, the insurance company won’t pay any money.

What do you need to know about it?

Like many other types of policies, term insurance can be of different types. The first important point is the period of insurance. It can be from several months (or even a month) to 20 or 30 years. Everything depends on the company where you apply to.

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Another important point to understand is premium. Premiums are calculating personally for any case. The points that seem to be important for such a calculation are:

  • State of health;
  • Age;
  • Prognosis.

Sometimes insurance companies insist on medical examination. It helps them prove the client’s health and clarify other things. One of the things, that should be noted is the premium peculiarity. It is fixed up to the length of the period of term insurance. If a person dies before the coverage lasts, the insurance company will pay the rest part of the policy. If the client dies after the end of the coverage, the company will not pay any compensation. In most cases, premiums can cost higher when the coverage is being prolonged.

Premiums differ according to the age of the client and the sum of payouts. If a person wants to get 30-years insurance it can cost about $15 a month in case the client is quite young. If the person is advanced in years, the sum per month can be higher. In fact, there are a lot of facts that influence the price of term insurance.

Types of insurance

Besides the abovementioned policies, there are other options that spread on term insurance. They can be the following:

  1. Convertible term. It lets the client change the option of insurance. The client can change the period into the whole life or permanent coverage. One of the advantages of this type is that the client doesn’t need to go through a medical check.
  2. Increasing Term. It includes the growth of the sum that can be paid out through the years. This term doesn’t allow the client to get another policy as the client becomes older. The client won’t get additional payments as it is in the traditional policy.
  3. Mortgage Term. It works vice versa in comparison with the increasing term. Within the years, the death payment is getting smaller. At the same time, the advantage of this cover is that the premium payment is still constant even when the benefits decrease.
  4. Annual Renewable. In this case, the coverage of term insurance will be renewed every year. The client doesn’t need to care about it. The policy is prolonged every year automatically. The only disadvantage of the policy is that the costs are increasing within the time of insurance.

There are different types of term insurance. The client can choose what he needs. It is possible to compare the offers from different companies. Some companies can provide extra options for life insurance. Though the sum can be rather high, the payments can be large in case of death. Any policy depends on many factors. It is better to consult an insurance agent before agreeing with any company. Sometimes there are offers for the family, where the prices can be lower and the conditions of the policy can be almost the same as for the individuals.

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