Simple Guide to Term Life Insurance

Term Life Insurance

The sad truth in life is that we all die. Fortunately, there are a few things you can do to ensure that your death is not as tragic. One of these things is purchasing life insurance coverage. Yes, getting the right life insurance policy may prove to be a tedious affair but trust me, this is not something you want to postpone. Follow along as we explore the most common type of life insurance and perhaps the most suitable for you: Term Life Insurance.

What is term life insurance?

It is an insurance policy that offers coverage for a certain amount of time. Depending on the company, the time could be anywhere between 5-30 years. In case of death before the expiry of the term period, beneficiaries will receive money. This is assuming you have not been skipping your premium payments. However, if by the time of expiry you are still alive then you can either choose to renew your policy or terminate the plan. 

It is important to note that before you renew your policy, you will have to undergo the medical examination again to rule out any health issues. Also, you will have to pay higher premiums because, well, you are much older now. In fact, it is not uncommon for an insurance company to decline the renewal of your policy due to a health issue. Not to worry though, most term life insurance policies automatically incorporate a conversion rider. The rider is to ensure that the insurance company cannot decline your policy renewal regardless of your age or health condition.

Why do I need term life insurance?

Your life insurance needs will be largely determined by the people dependent on you. If you have no one looking to you for financial support, then life insurance is probably not for you. However, if you have children that need to be taken through school, then you might want to consider getting insured. If your salary is the main source of livelihood for your family, then it makes sense that they should be protected in case you die, right?  Getting term life insurance gives you a peace of mind. You have the assurance that once you are gone, your family will be well taken care of.

Purchasing term life insurance policy

So, you have finally made the decision to take up term life insurance but you are now wondering, “how much do I need?” The answer is that it depends. How many people are dependent on you? How long will they be dependent on you? What is your debt situation? What is your lifestyle? Once you have answered all these questions, the next step is to visit different insurance companies and obtain their quotes. It’s not surprising to find some insurance companies offering a longer term length than others for the same amount of money. Go for the best deal. Also, we recommend purchasing your insurance as early as possible. Don’t wait until you have started a family to start considering getting life insurance. By purchasing your insurance policy early, you will essentially be getting more coverage for less money. You can enlist the services of a financial planning professional to get the most out of your insurance policy.

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