Professional Indemnity Insurance – Managing Risk F

Author: Adolphpaul
Source: articlesbase.com

Term life insurance coverage provides limited time cover. After that period, the insured can either drop the policy or pay annually increasing premiums to continue the coverage. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is often the most economical way to purchase a substantial death benefit on a coverage amount per premium basis.Term life insurance is the original form of life insurance and is considered to be pure insurance protection because it builds no cash value. Term insurance functions in a manner similar to most other types of insurance. In doing so, it satisfies claims against what is insured if the premiums are up to date and the contract has not expired, and does not expect a return of premium dollars if no claims are filed. Whether or not damaging events will occur is uncertain, and if the policy holder discontinues coverage because he has sold the insured car or home the insurance company will not refund the premium. This is purely risk protection and not a value adds unlike other insurance policies.This policy provides coverage only during the term of the policy. A person is expected to pay premium and in case of his/her death within the specified term of the policy, the beneficiary is entitled to the amount of death benefit. The beneficiary receives a lump sum amount non taxable death benefit. The amount of death benefit, however, does not contain a savings component. In other words, there is no wealth accumulation on the premium. The amount of money received as death benefit is the same as the amount mentioned in the policy. In case the insurer lives past the stated term he is not entitled to claim the policy amount. If the insurer feels that he is short of cash, he cannot the surrender the policy and withdraw cash. This means, there is no early exit option. Moreover, if the insurer dies after the expiry of the stated term, the beneficiary cannot claim the death benefit.This kind of policy is ideally suited for healthy people with limited income. The premium is low as compared to that of a permanent life insurance policy. It is useful for people who want to ensure that in case of their death, their children can attend college, or their spouse can pay off the mortgage on the house.

Group Health Solutions Inc. is an employee benefits agency offering a wide range of group and individual health / medical benefit services including term life insurance.