What Is Life Insurance | What Is Term Life Insurance | What Does Term Life Insurance Cover
Life insurance is a contract between an insurance company and an individual. This contract states that the individual will be paying premiums for insurance that the company provides. This typically means an insurance company provides a lump sum payment, also known as a death benefit, to beneficiaries upon the individual’s death.
Generally, the type of life insurance selected depends on the needs and goals of the individual wanting it. The two common types of life insurance are term insurance and whole insurance.
This particular insurance aims to provide an individual with financial protection for a specific period. This period could be around 10 or 20 years. This also means that the premium payment an individual has to pay remains the same throughout the selected term. However, once the term ends, the insurer may offer more coverage, but this usually involves a higher premium payment rate. Often people choose term insurance over other types of life insurance because it is generally much cheaper.
The term life insurance plan provides a lump sum to the beneficiary of the owner in case of death. As the owner pays premium payments, they can receive a large amount as coverage or a safety net for their loved ones.
The costs of term insurance, as we mentioned, is less than whole insurance plans. However, the payment amount may vary depending on the insurance company. A general rule of thumb is that the insurance only activates 30 days after purchasing it. Anyone between the ages of 18 and 60 can get it.
Benefits of term life insurance include:
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