A term life insurance plan, also known as the term insurance policy, is a type of life insurance that pays out to the nominees in the event of the insured death. In exchange for this guarantee, a set of amounts of premium is deducted at regular intervals. In addition, purchasing a term insurance policy during the current COVID 19 outbreak is a must. So before you have to buy a term life insurance policy let us check the term life insurance pros and cons to better understand this topic.
Pros OR Advantages of term life insurance:
- It is greatest death benefits for lowest premium outlay term life insurance advantages.
- Term policies can be combined to serve the specialized needs of individual policyholders.
- A term policy is the best alternative for temporary and short time frame needs.
- Younger clients may acquire more coverage at lower immediate costs.
- Conversion features of renewable or convertible policies provide higher future death protection.
- Preserves confidentiality.
- Lower premiums when you are younger.
- can be converted to whole life insurance.
- Policies can be used as collateral for loans.
- Death benefits proceeds are exempt from estate taxes in certain situations.
- Beneficiary proceeds are not subject to federal income taxes.
- Proceeds can be paid to the beneficiary without delay.
Cons OR Disadvantages of term life insurance:
- It is temporary coverage.
- Must re-qualify at the end of the term.
- Difficult to qualify if there is a significant health issue.
- Policy accumulates no cash value.
- Premiums can go every time you take out a new term.
- Most returns of premium plans require a higher premium payment.
- The policy should not be considered as an investment plan.
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