Future-Proofing Your Family: 5 Key Benefits of Term Insurance - Money Soldiers

Future-Proofing Your Family: 5 Key Benefits of Term Insurance

Have you ever considered what would happen if the breadwinner of the family were to die? Beyond the emotional heartbreak, the financial security of your family would be in jeopardy. Term insurance offers a safety net for your family in the unfortunate scenario of your death.

Like any life insurance package, the product needs to match your family’s individual circumstances. Term insurance products run for a set amount of time, ranging from 5 to 30 years. The price remains fixed for the agreed term, meaning you pay the same price for the policy each year. If you die during the term, your loved ones will receive the financial value of the policy. There are several prominent benefits of taking out term insurance.

Affordability

Generally, term insurance policy premiums are more affordable than permanent or whole insurance policies. They are set to a fixed level, so there are no unexpected annual price increases.

Term insurance policies often provide the largest death benefit for the smallest cost, making them a popular option among young families.

The simplicity of term insurance plans makes it easy to compare between products. All term plans are structurally similar, and deals can be easily found by comparing the premium cost and the size of the death benefit. Use a term insurance premium calculator to find out what your premium would be.

Flexibility

Term policies offer more flexible terms than other forms of life insurance. Getting out of a term policy is simple, you stop paying the premiums, and the cover ends. With cash value policies, getting out of the agreement will usually incur a financial loss.

It is also easy to convert a term policy into a whole life policy. Many term policies offer convertibility, which allows the policyholder to convert their term policy into a whole life policy once their term ends, without undergoing a medical exam.

Term Insurance Policies are Not Considered Part of the Probate Estate

Once the policyholder dies, the term insurance policy is not evaluated as part of the probate estate. This means that the beneficiary will receive the full amount of the policy without any delay. For families grappling with funeral costs, the immediate payout often provides a much-needed financial windfall.

Tax Benefits

As the policy is not considered part of the estate, they are usually exempt from inheritance taxes. There is also no public record of the death benefit amount paid out once the policyholder dies.

Can Be Used as Collateral

Although lenders generally prefer permanent and whole life insurance policies, it is possible to use term insurance policies as collateral to secure a personal loan. Providing you have a strong credit score and the lender does not perceive you to be a risk, in most cases, they will grant a loan on term insurance policies. In the event of death, the loan would be repaid from the death benefit amount.

A term insurance policy provides your family with the financial security it needs. Don’t leave them under-prepared and unprotected in the event of your death. Fool-proof your family’s future with an affordable and flexible term insurance policy package.

About Aegon Life

A joint venture between Aegon – world’s leading financial services and Bennett, Coleman & Company – India’s leading media house, Aegon Life Insurance launched its pan-India operations in July 2008. Armed with a vision to be the most recommended new age life insurance company, Aegon Life adopts the power of global expertise by leveraging digital platforms to bring transparent solutions, and to prioritize customer needs. Our financial planning and investment solutions include term life insurance plans, pension plans, unit-linked insurance plans (ULIPs), health insurance plans, child education plans, and more.

 

Jesse Fin
 

Jesse worked as a journalist for a large tv station in Korea in her past life. She now works full time at home as a blogger and loves to help her friends manage their personal budgets.

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