6 Benefits of Term Life Insurance and its Types
Insurance benefits for customers quite a lot depending on the type of insurance used, one of which is additional term benefits. Term life insurance is one of the insurances that is quite a choice for insurance users.
Term life insurance is a life insurance product that provides protection for a certain period according to the customer's wishes or can also be called term life insurance.
Customers can determine insurance protection for the next 10 years, 30 years, or also up to a certain age.
An insurance will be very useful for customers, especially to provide protection from unpredictable risks. Likewise with term life insurance, here are some of the benefits.
1. Risk gain over death
Term life insurance offers protection against the risk of death for a certain period of time.
In addition, the number of death claims from term life insurance, the value can be higher than whole life insurance.
Whole life insurance does offer death benefits and maturity benefits, but term life insurance has a higher investment growth than whole life insurance.
2. Benefit of risk coverage
The next benefit of term insurance is risk coverage that customers can get.
Dependents of the customer's family members will get this benefit at the amount specified in the policy, it may continue to decrease or increase.
However, in term life insurance dividends are not paid for years as in whole life insurance, but term life insurance can protect dependents of family members from policy holders.
3. More flexible
It is more flexible in term insurance, for example, if the customer stops paying the insurance premium, the coverage will officially end automatically.
Or if the customer is able to settle the premium to maturity, the policy will also pay the premium that has been paid.
Or it could be that if the customer terminates the policy before the maturity period, the customer will not get the maturity benefit, but will continue to receive the policy and premiums that have been paid.
4. Premium amount according to ability
The next benefit of term life insurance is the amount of premium that can be adjusted according to the customer's ability.
So that customers do not need to worry about the amount of premium that is burdensome, because it can adjust to the customer's ability.
5. Facilitate long-term fund management
If the customer has a long-term financial plan, such as children's education, retirement insurance, or a business establishment plan, term life insurance is very suitable to help manage these long-term funds.
This is because customers no longer need to bother setting aside personal money for several examples of these long-term fund management plans.
The thing that needs to be done is to only pay a premium and focus on the things to be achieved.
6. Provide financial protection to the family
The next benefit of term life insurance is to provide a sense of security to the insured's family from a financial point of view.
Moreover, if the insured is the breadwinner of the family, it can prevent the family from temporarily losing their income.
Types of term life insurance
Term life insurance has different types, customers can determine which type of term life insurance to choose. The following are the types of term life insurance that customers can choose from.
1. Yearly Renewable Term (YRT) insurance
This Yearly Renewable Term or YRT term insurance is a term insurance that has an active period of one year and can be renewed annually up to a certain age limit. Usually this insurance can be continuously renewed until the age of 65 to 70 years.
However, it should be noted, because this type of insurance can be renewed every year, the cost of policy premiums can vary and tends to increase every year.
This is because the age of customers is increasing and the level of risk is getting heavier.
2. Fixed Term Insurance
Fixed term insurance is term insurance that has a predetermined period of time according to the protection period for the policy.
The term of this type of insurance can be more than one year so there is no need to renew it every year.
3. Term Insurance Increases
As the name implies, this type of increased term insurance starts from a certain amount with a set percentage periodically when the policy is still active.
The premium will automatically increase according to the increase in the coverage.
This type of insurance will protect the policy from inflation because the protection can increase every year.
Even the increase in premium costs is also in line with the increase in the sum insured that will be obtained by customers.
4. Term insurance decreases
Declining term insurance is insurance whose benefits will decrease over the term of the policy.
Generally, this type of insurance is related to credit loans. The amount of benefits obtained can decrease until the end of the policy term.
5. Family Income Benefits
This family income benefit is part of the additional benefits attached to the permanent insurance policy owned by the customer.
This additional benefit can be in the form of providing income per month, per quarter. or per year to the insured family.
If the insurance period has expired, the customer can determine whether to extend the insurance period or let the insurance expire at that time.
Term life insurance is suitable for someone who wants to protect financially against the risk of death, so that the future of his family remains secure.
After understanding the meaning of term life insurance, the benefits of term life insurance, and the types of term life insurance, it can be taken into consideration if you want to take the term life insurance.
All types of insurance provide the main benefit of protection against an unpredictable risk, as well as term life insurance.
Customers can consider term life insurance with all the important benefits of insurance in it.