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Term life insurance is a type of life insurance whereby the policy holder agrees to pay into a policy for a certain amount of time or ‘term’. This then qualifies the holder to the benefits of a payout in the event of their death. It is the least expensive form of life insurance as it is designed only to cover the insured party for the term of the agreement. Once this term is over the insured party must seek a renewal or other means of resolution. It works in a manor very similar to car insurance or house insurance, whereby the client pays a set amount of money each month over the specified term, and during this time they are covered up to a certain pre arranged amount (depending on circumstances) in the event of their death. Once the agreed term is over the cover no longer stands. There are many benefits to this system, the main one being that it is the cheapest option for life insurance. This means that it is accessible to more people that would not otherwise be able to afford other options. It is applicable to practicably anyone who wishes to ensure that their loved ones would not be left in financial difficulties should they pass away. It’s primary function is to ensure that the family members left behind after a death are not left in financial hardships due to the loss of income of the deceased. This includes things such as mortgage payments, consumer debt, education costs for dependants, primary care and funeral costs amongst other things. It is often something that people consider when they are starting a family and wish to ensure that if something happened to them their families would not be left in financial difficulties. The length of term life insurance is something that must be considered, and in many cases this term may extend until retirement age, where by this time the clients hope to have saved enough money to provide financial security for their dependants. The simplest length of term is a one year contract. This means that the client will make payments during that year and if they should die during that year then death benefit would be paid out, however as soon as the term is over the insurance is invalid and no payments would be made. The likely hood of a person dying during the term of a one year policy is very low, and therefore it is unlikely that the client would be refused a contract. The main problem with a one year contract however is in getting a renewal. Should a client become terminally ill during their one year contract but not actually die, it may be extremely difficult for them to renew the policy when the life insurance company knows the risk of a full payout is very high. Some policies do protect against this with a guaranteed renewal feature written into the policy. This ensured the client can renew the policy the following year without proof of insurability. My Insurance Expert will help you find term life insurance that fits all of your individual needs. The world of life insurance doesn't have to be difficult. With the right advisor you can give your family the protection they need and have peace of mind.
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