Term Life Insurance FAQs
August 20th, 2010 | Author: weissheiss
If you decide to take up a life insurance policy and you have some questions regarding a term life. Below are some of the frequently asked questions:
What is a term life insurance?
A term life insurance provides coverage with a fixed premium in a specific period. It is a type of simplest life insurance with inexpensive premium. It is a non-participating policy with no cash build-up feature.
Will the premium increase?
The premium on the term policy will increase upon renewal as the insured grows older. For instance, an annual term policy carry a premium that increase every year. A five-year term policy carry a premium that increase after five years.
Can I get back my money when I decide to terminate the policy?
No, it does not carry a cash build-up feature and therefore you get no money when you decide to terminate the policy.
Will my policy matures?
No, it never matures. If you are buying a 10-year term policy, it will ‘expire’ after 10 years.
Am I entitled to cash return when my policy expires?
An ordinary term life do not pay out cash when your policy expires. However, insurance companies have recently develop products that pay out cash similar to the amount you invested to the policy when it expires.
Do I have to go for a medical examination prior to buying the insurance?
Yes, you need to go for basic physical examinations to make sure you are insurable.
Is the death benefit tax free?
Yes, the amount compensated as death benefit in the policy is tax free.
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