As its title indicates, Term Insurance refers to a policy that has been taken out to cover a particular circumstance or a group of circumstances that are expected to present a risk for a certain defined period of time. Such events could be:
To cover a mortgage or mortgages that are being repaid over a given number of years
To cover the period before a child will become self sufficient
To protect ones family until retirement age
To cover a mortgage or mortgages that are being repaid over a given number of years
To cover the period before a child will become self sufficient
To protect ones family until retirement age
Definition of these types of Insurances
The three types
When to use which type
Term Insurance, What it means !
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There are three different approaches to these insurances and each has a separate title.
Decreasing Term, Level Term, Increasing Term
The terms "decreasing", "level" and "increasing", refers to the final amount that could be paid out, relative to the initial sum assured. In all cases, the monthly payments remain the same throughout the period of the policy. These three insurance policy types can be arranged to be correct for a variety of requirements as shown below.
Decreasing Term, Level Term, Increasing Term
The terms "decreasing", "level" and "increasing", refers to the final amount that could be paid out, relative to the initial sum assured. In all cases, the monthly payments remain the same throughout the period of the policy. These three insurance policy types can be arranged to be correct for a variety of requirements as shown below.
"Decreasing"; This is used in cases where your need for insurance decreases as the years go by. It's commonly used to cover repayment type mortgages where the loan that needs to be repaid will gradually reduce until it reaches zero. Another use could be where someone wanted to protect themselves until they retire and receive their pension. In this case, as each year goes by, the amount required to support you till your chosen retirement age will become less.
"Level", This would be used in situations where you wanted a given amount to be paid out in the event of a claim
"Increasing"; This is used in situations where you would want the amount of cover to keep up with inflation, as the years go by.
Life Insurance Basic Principles
Term Insurance
Accident Sickness & Unemployment (ASU)
Critical Illness
Insurance
Insurance
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CharltonOnLine.com is a trading name of Charlton Marketing and Development Ltd.
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