What is Term Life Insurance Type Benefits
Term life insurance is a type of life insurance that provides coverage for a specified period of time, or “term.” If the insured person dies during the term, the death benefit is paid to the designated beneficiaries.
If the insured person does not die during the term, the policy expires and no death benefit is paid. It is typically less expensive than permanent life insurance, such as whole life insurance, but it does not build cash value.
Benefits Of Term Life Insurance
Term life insurance provides coverage for a specific period of time, typically 10, 20, or 30 years. The main benefit of term life insurance is that it is typically less expensive than permanent life insurance, such as whole life or universal life. This can make it a more affordable option for people who are on a tight budget.
Additionally, term life insurance provides a death benefit to the beneficiaries of the policyholder in the event of the policyholder’s death during the term of the policy. This can provide financial security for the policyholder’s loved ones.
Types of Term Life Insurance
There are two main types of term life insurance: level term and decreasing term.
- Level term: This type of term life insurance provides a death benefit that remains the same throughout the term of the policy. The premium is also fixed and remains the same throughout the term.
- Decreasing term: This type of term life insurance provides a death benefit that decreases over time. This type of policy is typically used to cover a decreasing financial obligation, such as a mortgage. The premium for this type of policy is generally lower than for a level term policy, but it increases as the death benefit decreases.
Additionally, there are some variations of term life insurance like, Renewable Term Life Insurance, Convertible Term Life Insurance, Return of Premium Term Life Insurance, etc.
Best Term Life Insurance in india
There are many term life insurance options available in India. Some of the top insurance companies in India that offer term life insurance policies include LIC (Life Insurance Corporation of India), HDFC Life, ICICI Prudential Life Insurance, SBI Life Insurance, and Kotak Mahindra Life Insurance.
Factors to consider when choosing a term life insurance policy include the company’s reputation, the policy’s coverage and benefits, and the premium cost. It is always recommended to compare the policies from different insurance providers and select the one which suits you the best.
Term life insurance rates by age
Term life insurance rates generally increase with age. This is because as people get older, they are more likely to develop health conditions or illnesses that may make them a higher risk for the insurance company. Additionally, older individuals may not have as many years left to pay premiums, so the insurance company may charge higher rates to make up for the shorter period of coverage.
As a general rule, term life insurance rates are typically the lowest for young, healthy individuals who purchase a policy early in life. The premium for a 25 year old will be lower than that of 30 year old, and so on.
Here are some examples of average term life insurance rates by age:
- A 20-year-old non-smoker in good health may be able to purchase a 10 lakh, 20-year term life insurance policy for as little as Rs.4000* per month.
- A 30-year-old non-smoker in good health may be able to purchase a 10 lakh 20-year term life insurance policy for as little as Rs.4500* per month.
- A 40-year-old non-smoker in good health may be able to purchase a 10 lakh 20-year term life insurance policy for as little as Rs.6000* per month.
- A 50-year-old non-smoker in good health may be able to purchase a 10 lakh 20-year term life insurance policy for as little as Rs.13000* per month.
It’s important to note that these are just averages and your rate will depend on a variety of factors including your age, gender, health, and lifestyle habits.
*The above-given premium rates are for illustration purposes only*Please refer to official website for the exact premium.
What is the main disadvantage of term life insurance?
The main disadvantage of term life insurance is that it does not build cash value over time. This means that the policyholder does not have the option to borrow against the policy or cash it in for the accumulated value.
Additionally, at the end of the term, the policyholder may need to purchase a new policy at a higher premium rate due to age or health changes, which can make the coverage more expensive over time.
Additionally, the policy does not have the guarantee of coverage for the lifetime of the policyholder. Once the term of the policy ends, the coverage ends as well and the policyholder will be required to renew the policy if they want to continue to be covered.
