What is a term plan in life insurance?
Term insurance is a life insurance product, which offers financial coverage to the policyholder for a specific time period. In case of death of the insured individual during the policy term, the death benefit is paid by the company to the beneficiary.
What is a term life insurance and how does it work?
A term life policy is a contract between you and an insurance company for a defined period, typically between 10 and 30 years. During that term, you promise to pay a premium each month. In return, the company promises to pay a specific amount of money – a death benefit – if you pass away during the term.
What is the benefit of term life insurance?
Term life insurance offers temporary financial protection — usually five to 30 years — for a low, fixed cost. This type of life insurance is best for meeting short-term financial needs, like paying off debts, replacing your income, covering childcare costs and funding your child's education.
What is difference between term & life insurance?
Key Takeaways. Term life is pure insurance, whereas whole life adds a cash value component that you can tap during your lifetime. Term coverage only protects you for a limited number of years, while whole life provides lifelong protection—if you can keep up with the premium payments.