Term Life Assurance
Term life insurance is a contract between an individual(s) and an insurance company for a set period of time to protect survivors against the hardship due to the death of the insured. The insurance proceeds are paid to the beneficiary, or beneficiaries, at the time of death. There are no investment elements to term life insurance and no cash build up, which makes the initial premium less expensive than that of a whole of life insurance policy.
The amount of premiums payable under a term life insurance plan depends on age and health. Over time, the premiums may increase with advancing age. Therefore, the insured will be subject to the relevant company’s medical underwriting procedures at the time of purchase.
Objective
To provide death benefits for a set period of time.
Suitability
Term life insurance is suited for individual(s) with a time definable liability.
Features
Low cost – Term life insurance can be relatively inexpensive. This is especially attractive to younger investors who have a smaller net worth.
Fewer Long-term Benefits – Term insurance provides no retirement benefits or cash value later on.
Rising Premiums – Delaying taking out a policy can cause premiums to rise with age and may eventually become unaffordable.
