Life insurance is a contract between an individual and a company that pays out if the insured person dies. If a person signs a contract with an insurance company for a limited time period, and in a case of a tragedy the person dies, the company will pay the beneficiaries. This life insurance, on the other hand, is also known as term life insurance.
Term life insurance has a stand-out factor of defined time and the age domain of the consumer. It is not suitable for people who can avail benefits for their whole life. It is also not feasible for people who want to avail final expense policy benefits.
Term Life insurance providers normally limit the age of individuals around 30 years of age. It also provides a couple of unique attributes, which make it the most suitable insurance policy for a wide range of consumers.
- Affirmation of perks by the insurance company till the validity of the policy.
- The insurance company does not demand interest on the policyholder.
These features make Term insurance policy an ideal option for young people.
Classification of Term Life insurance
There are subtypes of Term life insurance. These types provide flexibility for the consumer in different aspects.
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Yearly Term Insurance
It is a year subscription type of insurance which is renewable by the end of the insurance year. The insurance quote increases with the passing years.
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Increasing Term Insurance
Increasing term insurance offers an ascend in the benefits offered against time and an increasing rate of the life insurance quote. It is beneficial for the type of people who have a higher expenditure initially.
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Decreasing Term Insurance
Mortgage insurance is another name of Decreasing term insurance. It is the reflection of increasing term insurance policy. The benefits decrease with respect to time. But the payable premium remains constant. The concept behind it is that an individual needs less support as the mortgage decreases with time.
Term life insurance offers a feature of Return Premium. The return premium enables the insured person to get the refund after the Term life insurance policy expires. It comes with additional charges over the base premium. Some insurance companies refund the base premium paid by the insured person while a few of them refund both the base premium and the additional cost.
The insurance policy might cover a wide domain of consumers but not all. A person with serious medical problems is not able to pass a medical exam. The medical exam is compulsory for all people who want to avail any kind of life insurance policy. To cover such people there is another insurance policy that covers the funeral expenses of these individuals. This type of policy is also known as Final expense policy.
Final expense Policy is very similar to a whole life insurance policy. The basic principle is that individuals who are medically unstable or on their deathbeds can’t avail insurance to look after expenses for their final ceremony of funeral. It provides the consumer an exemption of medical exams and supports the person to payout the funeral expenses in advance.
Sum Up
Life insurance policies provide relief to people to ease the burden of future expenses. It provides balance in current and future expenses by charging a premium. The future expense can be availed either by the beneficiaries of the insured individual or by the individual himself. It all depends on the type of contract between the insurance company and the consumer.
Term Life insurance provides both advantages. It pays benefits to the beneficiaries of the insured after the demise. If the person survives through the insurance policy time and also paid for the return premium factor, the company pays out the premium to the insured.
The insurance companies attract more consumers by manipulating strategies to gain the attraction of more people. It results in policies like the Final Expense policy which covers individuals who are ineligible for any other insurance policy.
