The benefits of term insurance plans have often been a matter of debate amongst individuals wishing to acquire decent insurance protection or coverage for themselves. Term life insurance can be beneficial if policy holders know how to maximize the benefits of the same in a tangible manner. This plan essentially provides coverage for specific time periods which are otherwise referred to as policy terms. These terms start and end on pre-fixed dates as well. Benefits are paid out by the insurance company in case of death of the policy holder within the same dates. However, in normal situations, policy holders will have to keep renewing the policy post the initially fixed time period. Failure to renew the same will result in instant expiration which will totally negate any possible cash value of the same and all other benefits.
Term insurance plans always provide ample insurance coverage which is deemed to be sufficiently huge at times. However, the catch here is that since death risks automatically increase with age, insurance premiums also keep on going up every time a policy holder renews his/her policy. Additionally, this leads to a huge financial payment burden on many individuals and may well make the plan unaffordable after two or three renewals! This is one aspect that can often have individuals worried about opting for this kind of plan. However, you have to remember that these plans will give you the most insurance coverage among all other counterparts and that too for a sizeably low premium amount when you think of the average ratio of these two factors for other types of plans.
Term insurance plans will give you death benefits that are not taxable at all and the flexibility of policy times is another USP too! You can purchase for 10 or 20 years terms or even as low as 1 year if you wish to test the waters first! You can also convert these plans to whole life insurance plans or other types in most cases. However, the increasing unaffordability of these plans with advancing age and renewals is difficult to commit to for many people. There are no dividends or cash values offered by these plans and this may be another deterrent for individuals looking to reap benefits out of their insurance investments.
