Term is a life insurance product offered by an insurance company which offers financial coverage to the policyholder for a specific period. It is designed to financially protect one’s family in case of death of the bread-earner. A term insurance plan is the simplest forms of financial protection that can help your family meet its financial needs in your absence. Term insurance plans are much cheaper compared to whole life insurance plans because these plans carry no cash value with a sole aim to provide pure financial protection benefits.
How does term insurance work?
If you apply for a term insurance plan, you will be required to pay a premium. If the life insured dies during the coverage period, then the person nominated will receive the death benefits. There are a variety of term plans in the market ranging from 1-year coverage up to 40 years. Term plans are usually renewable once the policy term ends.