Term Life Insurance
When you take out a mortgage loan, you make a commitment to Term life insurance is the simplest, most affordable type of life insurance available. You take out life cover for the specified term, such as 15, 20 or up to 50 years and if you die during that term, the policy pays out to your named beneficiaries. Because term life insurance does not have cash value, it is the most budget-conscious life cover option.
Why You Need Term Life Assurance
Term life insurance is a cost-effective way to make sure your loved ones are taken care of in the event of your death. Taking out term life assurance can cover mortgage payments and living costs for your dependent family if you are not there to do it. Most people choose term life insurance that will cover the period of time their family is paying a mortgage, raising children and covering university costs.
Costs for Term Life Cover
You can choose from two types of premiums for life cover – guaranteed premiums and reviewable premiums. Guaranteed premiums will remain the same for the life of the policy while reviewable premiums can be periodically reviewed by the company issuing the policy. Term life cover premiums are based on factors such as your age, sex, current health, medical history, family medical history, the term of cover and the sum assured.
Types of Term Life Assurance
There are several types of term life insurance to choose from, based on your individualized needs including:
• level term assurance pays out a sum of money when the policyholder
dies during the term of the policy and that sum is guaranteed throughout
the life of the policy;
• convertible term life cover is level term cover that offers you
the option to revert the policy to whole-to-life or endowment insurance;
• renewable life assurance gives you the option to renew the policy
on the expiration date without going through a medical review;
• decreasing term life cover is usually used to protect a mortgage,
is tied to the mortgage payment and the sum assured decreases accordingly
during the life of the policy;
• increasing term life assurance has an increasing sum assured each
year of the life of the policy to combat ongoing inflation; and
• index linked term life cover links the increase of the sum assured
to the Retail Price Index.
What Type of Term Life Insurance Is Best For You
Each type of term life cover has its own benefits, depending on what your family or business needs are. Term life assurance can be taken out for a variety of reasons, including paying off your mortgage, ensuring a business you are partner to remains in operation and caring for the basic needs of your loved ones after you die. Level term assurance is a straightforward option while convertible term cover gives you the option to change your coverage as you get older and your needs change. Renewable life cover is ideal for folks who may have developing health conditions and do not want to go through a medical review. Decreasing term cover is used to pay off a mortgage while increasing term assurance and index linked term cover will take care of your family's needs throughout the years because they account for inflation.
Term life insurance offers you a flexible, affordable way to take care
of your dependents when they need it the most.