Term Insurance

Term insurance is a type of life insurance that offers financial protection for a specific period of time, or term. If the policyholder dies during the term, the insurance company pays a death benefit to the beneficiary.

Here are some things to know about Term Insurance:

Policy term

The length of time the policy covers, which can range from 5 years to the policyholder’s 99th birthday.

Premiums

The premiums can be paid at once or at regular intervals. The amount of the premium depends on the payment method and the length of the term.

Beneficiaries

The death benefit is usually paid to a spouse or child, but it can also be paid to a trust, charitable organization, or friend.

Tax benefits

The death benefit is usually paid out income tax-free, unless the premiums were paid with pre-tax dollars.

Medical exams

Most insurance companies require a medical exam as part of the application process.

Riders

Policyholders can add riders to their policy to cover additional expenses, such as critical illness, disability, or accidental death.

Claim settlement ratio

The claim settlement ratio shows how likely an insurer is to pay out the benefit amount to the nominee.