Life insurance is taken primarily to provide protection and safeguard your families and other dependents future by providing them financial stability, as the primary earner. Initially when the concept of life insurance came into existence term life insurance was the only life insurance available, but as time passed by more and more products came into existence. Even though other life insurance products provide more cash incentives, term life insurance is still the favorite among many because it is the cheapest of them all. Term life insurance simply provides protection without the burden of extra cash like in the case of whole life insurance and universal life insurance.
Suppose, if tragedy comes and you die all of a sudden, then your family and other dependents would be in financial trouble, but term life insurance helps your dependents by offering financial coverage and offers financial compensation, for the loss of your income. This way they are saved from getting into the financial mess. Although this may vary depending on the percentage of total coverage of that initial loss based on the kind of policy you have taken.
With this insurance a person is actually covered from all the risks mentioned in the policy for a set period of time called the “term”. Once this term is over, it is up to the person insured whether or not he wants to continue with the policy. If a person wants to continue with the policy, he will have to pay the annual premium with a fresh rate which depends on your age. This insurance policy should not be treated as a means to pay the final expenses after your death. This insurance also helps to cover the financial liabilities of the person insured. These can be mortgages, consumer debts, dependent care and education fees of the dependents
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