Of late, it has been noticed that the concept of Term Life Insurance has become very popular and found many takers. But what exactly is Term Life Insurance? Well, Term Life Insurance can be understood be the most inexpensive and entirely basic form of life insurance available in the market. Term Life Insurance covers the bearer of the policy for a pre-determined, fixed period of time and it is availed in the form of a lump sum at one go if the bearer expires during the term of the policy.
The premium for Term Life Insurance policies are normally required to be paid on a monthly basis. However, there are some insurance policies in the market which allow for payment to be made on an annual basis. The bearer of the policy is covered only so long as he or she continues to pay the monthly premiums. The moment the payment is stopped the policy cover is lifted. There are options available which allow you to add supplementary policy options to the existing Term Life Insurance policies. Some of the additional policies added fall under the category of an insurance cover in the case of a critical illness. If the bearer avails of a cover for a critical illness, the money payable by the insurance plan can be received only once, either after the diagnosis of the illness or at the time of death of the bearer.
There are different categories of Term Life Insurance policies available. In the Level Term Insurance category a lump sum is payable to the family on the event of the death of the bearer of the policy. The sum of money to be paid under the policy remains unchanged throughout the entire period of the insurance policy term period. Under the category of Decreasing Term Insurance policies, the amount payable at the death of the policy bearer is decreased by a definite amount during the term. The amount decreases to nil by the end of the term. The purpose of such a policy cover is to pay off loans or mortgages where the payment amount is reduced per year.