The definition of term life insurance or term life insurance is a type of insurance that provides a fixed-term guarantee to policyholders (insured persons). This means that if there is a risk of death during the insurance period, the insurance company will pay the insurance amount to the heir.
However, if you live long until the end of the insurance period, you will usually not get any insurance amount, premiums paid, refunds of expired premiums, etc. Therefore, term life insurance is said to have no savings component and cannot be monetized.
Term life insurance is called the simplest and cheapest life insurance. This insurance is called a term because it only provides insurance protection for a period of time. The most widely offered term life insurance periods range from 1, 5, 10, 15, 20, 25, 30 years to certain ages, usually 65 years. For reference, most insurance companies do not sell term life insurance that extends beyond the insured’s 80th birthday.
What is Benefits of term life insurance?
Term Life Insurance Also known as term life insurance, it is believed that there are many advantages and advantages over other types of life insurance. What are the strengths and weaknesses?
First, term life insurance premiums are generally more affordable than other types of life insurance that offer the same level of protection. Even if calculated, the premium charged as a customer is equivalent to one-year, five-year, and 20-year term life insurance.
Second, the protection period can be adjusted as needed. The need for protection against the risk of death is paramount in terms of production time and the role of the earner. The advantage of term life insurance is that it provides the family with the flexibility to determine the protection period as needed.
Uniquely, there is something like Shariah term life insurance. According to him, if there are no claims and no deaths, there is a profit sharing function at the end of the insurance period.
The features of term life insurance products are as follows
- Term life insurance products cover a certain period of time, the so-called insurance period.
- If the insured dies within the specified period, insurance benefits will be paid. Insurance is valid even if the insured dies.
- If the insured is still alive until the end of the term, the policy can give the policyholder the right to continue life insurance coverage. If the policyholder does not continue, the policy will be terminated and the insurance company will not be obliged to provide further coverage.
- The best insurance is usually available in the form of insurance policies, but it can also be offered in the form of riders (additional insurance) in addition to the basic insurance.
There are two types of term life insurance coverage
- Term life insurance level; This means term life insurance with a fixed amount that provides the same amount of death benefits during the insurance period.
- Decrease in term life insurance: Means term life insurance with a reduced amount of insurance and provides death benefits that decrease in value during the coverage period.