Term Life Insurance is probably the most popular type of insurance policy. This is due, for the most part, to the lower cost of the premiums. Term life insurance covers the policy holder for a specific period of time, for a set premium. Once the policy expires the coverage is cancelled.

What Is Term Life Insurance?

If you are a single person, with no dependants, the chances are you have no need for Term Life Insurance as there will be no dependents under financial hardship should you die unexpectedly. If you are in business with partners, you may choose to get life insurance on the business owners so, in the event of a sudden death, there is a sum of money to help with the business transition.

The cost of term life insurance will vary depending on the circumstances of the person being insured. Actuarial tables give life expectancies depending on the details of the person to be insured. An 18 year old with no major health problems, who does not drink or smoke and leads a quiet life in a small town should have no problem in getting a 10 year term policy at a reasonable rate. Alternatively, a 95 year old heavy smoker who regularly goes mountain climbing might have some trouble in obtaining any insurance at all!

There are different reasons for purchasing Term Life insurance, the replacement of income upon the sudden death of the breadwinner being the most common.

There are studies that show that the numbers of claims against Term Life Insurance policies are very low – apparently around 1% is a general figure. This means that the premiums are low compared to the payout if there ends up being a claim.

Because of the low likelihood of an insurer having to pay a death benefit, Term Life Insurance seems better when considered in terms of coverage per premium expenditure.

Finally, remember to pay your premiums, otherwise the insurance company will have a reason to not pay out your Term Life Insurance in the event of your death.

Related Posts

1. Lien Holder’s Insurance Indemnity Clause
2. Indemnity Insurance Policy