Most people purchase life insurance policies to secure the future of their family. If you use it in the correct way it can be a great financial planning tool.
There are two types of life insurance. One is term life insurance and another one is whole life insurance. Term life insurance is easier than whole life insurance.
Term Life Insurance
The term life insurance policy is a contract between you and an Insurance Company, over a period of time between 10,20, and 30 years.
During this period each month, you have to pay a premium. If you pass away during this time your family will get a return of money as a death benefit.
If you are alive then you will get the money without death benefits only when your term period is over.
Can You Use Term Life Insurance While You Alive
Usually, term life insurance is designed for 10,20, or 30 years. You can get term life insurance for a specific period of time and then it ends. So that you can’t use it before an accident. If any things happen to you only then your family will get the death benefit.
So the bottom line is you can’t use your term life insurance while alive. Without any accident, you don’t get death benefits. Which means you are unable to cash out term life insurance.
When the specific period is over only then you will get the money but in that case you don’t get that much cash value.
Term Life Insurance How Does It Work?
Generally, Life Insurance is an agreement between the policyholder and company for 10, 20, or 30 years. If you die within this period your selected nominee will get the death benefit.
If you have alive during this period then after the specific period you will get the money without any death benefit.
when your tram policy is done the company will contact you and you don’t have to pay your premium you can cash out if you want or you can make your tram policy a permanent policy. In this case, most of the companies allowed to convert also have some requirements.
What Are The Benefits Of Term Life Insurance?
- Your family can be secure with financial support when you are not around.
- Term insurance can protect your mortgage, income, or children’s tuition.
- Term insurance covered you for 10,20 or 30 years.
- Term insurance policies are renewable without medical checkups.
- Like other property term policies also your own property, so with some consideration you can sell your term policy if you want.
- Term policy is typically less expensive than a whole-life policy. So it is more affordable.
Can You Convert Your Term Life Insurance Policy To Permanent Policy?
Once the term has expired some of the company even allow to convert whole life insurance.
Yes, you can convert your term policy to a permanent policy if you want. But there is some condition. If you full feel the condition you are alow to convert your policy. Most companies are allowed to convert not all companies. So if you thik about converting then check your companies rules is it available or not.
Term life insurance premiums are depend on various factors, such as your age, gender, the term of your policy, your health, gender, and other factors.
Purchase of life insurance maybe one of the most important decision. So if you have any doubt about this you can take expert help.