Insurance is a policy of protection by a company that gives guarantee of compensation to the insured person for their loss including death, damage or any other harm. Term insurance is a type of insurance policy that comprise of a certain time limit. That time can exceed from one month to several years. If the authorized insured person dies in that particular time limit, benefits of that policy will be given. On the other hand if the policy time expires and person dies after that time limit, No death benefit will be given to the insured person or his beneficiary.
Importance of Term Insurance
Please note that term insurance is a good bet for vehicle-related insurance also. However, it is important to know what a stand-alone insurance policy for car or two-wheeler insurance entails before committing to a term based insurance. Insurance based article such as http://www.thewealthbazaar.com/two-wheeler-insurance and http://www.business-standard.com/article/pf/what-is-a-no-claim-bonus-for-a-motor-insurance-policy-111040100077_1.html can help.
Term insurance consists of many types of insurance including health insurance, vehicle insurance, death insurance, property insurance etc.. It is wise and safe to have such kind of insurance policy which is not only cheap but most of the time very helpful in bad times. For Example, if anybody has insured his car under Term insurance policy and that car then get damaged by an accident, the authorized insured company will compensate all the loss of that accident. Similarly On the death of the insured, Term insurance pays the amount of the policy to the named beneficiary decided by the insured person. Beneficiary can be anyone who can take benefit from the authorized insured person’s property. Mostly beneficiaries are close relatives of the respective insured person. The entire installment paid is used to cover the cost of insurance protection. The best way to take full use of insurance policy is to first apply for the Term insurance which is inexpensive and easily affordable and after some years convert it into Permanent Insurance. By doing this, insured person can fully benefit himself from these policies.
Term insurance has many aspects stated below:
- Term insurance mostly has a defined time limit. The insured person has to make contract with the insurance company about the time limit and other important features.
- The insured person can take advantage of his/her Term insurance policy under that particular time slot. No benefit will be given beyond that time limit.
- Term insurance is an inexpensive method of gaining death benefit by just consuming few dollars.
- On the other hand Permanent insurance is a life time insurance, it is not bound to a certain time limit
- Permanent insurance is less beneficial from Term insurance because the latter is much more cheap and affordable.
- Term insurance includes many different types of policies. These policies include different time limit starting from 5 years up to 30 years.
- Most of the time Term insurance policy is flexible enough to convert in permanent insurance.
- The best thing in Term insurance policy is that it is renewable. It can b can renewed any time without any specific limitations.
- Fire insurance is a type of term insurance which compensates the loss done by fire in buildings, house of that insured person.
- Sometimes Fire insurance policy may contain exceptions including the cause of the fire, such as not including fires caused by wars or any other irrelevant source.
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