No matter who you are or what stage you’re at in your life, insurance is never a bad thing to have. Unfortunately, it’s something that almost 25% of US adults fail to think about and don’t possess. There are too many Americans who don’t understand the concept of life insurance and the different types of insurance plans that are available.
Term life insurance plans are among the most competitive in terms of what they offer and also the most simple to understand. If you’d like to learn more about this particular type of insurance plan, we’ve got you covered. Read on to learn everything you need to know about term life insurance now.
What Is Life Insurance?
Life insurance is a financial contract where an insurance company guarantees they will pay a specified sum after the death of the insured party. The insured party in turn pays regular premiums, usually on a monthly basis.
The purpose of a life insurance policy is to give a person the peace of mind that the loved ones they’ve left behind will have some form of financial protection.
There are two main categories of life insurance. These are whole life insurance and term life insurance.
What Are Term Life Insurance Plans?
As opposed to whole life insurance policies, which automatically extend until a person is deceased, term life insurance policies extend only for a predetermined amount of time.
Under the category of term life insurance, there are many different varieties available. Convertible term, increasing term, and mortgage term are three of the most common.
Which Plan Is Right for You?
A convertible term policy gives the policyholder the option of switching to a whole life insurance policy after a certain amount of time. Increasing term is when the death benefit amount increases the longer the policy is in place. Mortgage term is similar to a mortgage in that the death benefit amount decreases over time.
One of the most attractive features of term life insurance is that it’s one of the most affordable types. It’s also uncomplicated and easy to understand.
One of the main reasons a person takes out a term life insurance policy is when they have medium-term financial needs to meet. This includes things like medical debts, childcare costs, or education fees.
When you’re deciding which is the best life insurance policy for you there are a number of factors you should take into account. For example, what is your financial situation?
How much money do you have available to fund this plan? You should also think about what it is you’re looking to fund.
Your age will come into play too. The older you are, the higher a premium you’ll need to pay for your term insurance plan. If you need further advice on this topic, you can try seeking free quotes from companies such as outsetinsurance.com.
Choose the Best Insurance Plan for You
Term life insurance plans can be a savvy financial asset for a person to have. But you should do plenty of research before settling on the one that’s right for you.
If you’re looking for more helpful financial tips, we’ve got you covered. Check out the rest of our articles now.