Initially, term life insurance premiums are considerably lower than those of permanent life insurance, allowing you to purchase higher levels of death benefit coverage for a temporary period of time. This can be very important to young families that may have a limited budget but a significant need for a larger amount of protection. Term life insurance does not build equity in the form of cash value so it is often described as renting insurance protection rather than owning insurance protection.
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Key benefits
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Why is this important?
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Death benefit protection | If the insured dies within the term period, the insurance company pays a death benefit that can be used to pay for funeral expenses and outstanding debt. |
Income protection | A portion of a life insurance death benefit can be used to replace the income that is lost when a loved one dies. |
Business insurance needs | Key man insurance, Buy/Sell agreements and business loan protection are all popular uses of term life insurance. |
Tax advantages | Life insurance death proceeds are paid out income-tax free and
the term policy’s benefit is paid out income-tax free, an important feature when you consider how taxation can have an adverse effect on your savings growth potential. |
Conversion options | You have the ability to convert to a permanent policy should future circumstances require a more permanent life insurance need. |
Customizable | The option to design a policy that reflects your particular needs and situation. |
