There is no financial instrument as unique as a term insurance policy which assists you in securing the future of your family. Additionally, it can also give you other great advantages that probably your insurance agent didn’t inform you about. Here are some things you should know today.
What is life insurance?
A life insurance policy is a contract that is enforceable in court between a person and an insurance provider. Periodic premium payments must be made to the insurer by the person acquiring the coverage. In return, the insurer agrees to pay the beneficiary death benefits if the policyholder passes away within the policy’s term. If the insured individual lives out the policy’s term, certain life insurance policies can provide the policyholder with a lump sum payment in the form of maturity benefits.
What is Term Insurance?
Although a term insurance policy is the most basic form of life insurance, many experts believe it to be the greatest.
The term plan is a limited-time product that only provides insurance and has no savings or investment elements. It offers sizable assured cash at a premium that is significantly small in figures. Your term insurance will pay the sum insured to your family or nominees in the case of your passing during the policy period, relieving them of the financial burden.
You need to renew your term insurance without fail to keep receiving the security coverage if you live past the policy term. These days, term insurance policies even provide a Return of Premium option, thereby converting them into savings plans as well.
Additional Great Benefits of Term & Life Insurance
Taking a Loan Against Your Life Insurance
A loan secured by your existing life insurance policy is a good substitute for a personal loan or selling your assets to pay off debt. Loans against life insurance plans are increasingly being used to pay for urgent needs in the present. This is primarily due to the fact that it is a hassle-free solution that has many benefits over conventional types of loans. You can immediately obtain a loan based on your policy and benefit from an interest rate that is significantly lower than the rate for traditional borrowings. Having said that, there are a few crucial details you need to be aware of before applying for a loan against your insurance policy. Speak to your insurance agent about it.
Tax-Free Income Protection During Sickness
Both term insurance and life insurance can provide a lump sum tax-free payout in case you are diagnosed with any of the critical illnesses mentions in your policy document.
As Asset Proof for Visa Application
While applying for a travel visa such as a US visa, which required you to disclose your financial value/assets, your term insurance cover can act as an asset and add to your valuation.
There are a lot more benefits with a Term or Life Insurance policy. At The Insurance Advisor, we can analyse your need for insurance and provide you with the details for the right insurance policy that will fit your profile.
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