 Term insurance is the most popular and basic form of the life insurance.
It covers the insured for a fixed period (10-20-30-100 years) and pays out a one lump sum to beneficiaries if insured die during the policy term.
With some policies, there is a chance to add additional options, like critical illness and disability riders.
If insured wants to leave, a cash sum to his/her family, dependants or to pay off a mortgage after he/she has died, term insurance could be the right choice for them.
Meanwhile term insurance in comparison with the other kind of life insurance is the most affordable type.
Life insurance provides compensation in the event of the insured’s death. There are different variations of life insurance policies, but all can be categorized as either temporary (term life insurance) or permanent (universal life insurance, whole life insurance, and limited pay life insurance).
In a Life insurance policy, there are four main parties:
- the insurer (Insurance Company), usually a private life insurance company who underwrites the life insurance policy. This party is responsible for paying a benefit for the policy.
- The insured is the person who is covered by the life insurance policy. Generally, this means that a benefit will be paid in the event of the insured’s death.
- The owner of the policy is the person or company who actually purchases the life insurance. In the majority cases the insured and the owner is the same.
- The beneficiary is the person/s or company who receive a benefit from the life insurance policy in the event of the insured’s death.
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