Renewable Term Life Insurance Advantages and Disadvantages

Renewable Term Insurance is kind of investment where you protect your belongings, health, life and education. It is a secure net to fall back on when life is tough and complicated. However renewable term life insurance advantages and disadvantages comparison is essential.

Insurance is a contract of securing one's life or article. In this specific amount is secured by the policyholder for whole life (in terms of whole life insurance) or for certain set of years (in case of term insurance) via a trustworthy agent. If you are beginner, you need to learn a few key terms related to insurance.

Insurer and Insured 

The company or agent that insures or provides one insurance policy is referred as insurer whereas the one who seeks protection from sudden mishappening or death for financial stability is called insured.

Sum assured 

The sum of money that insured family obtains from the insurance company after death is sum assured. In some cases, the assured money is received after the maturity period.

Premium

In order to ensure the validity of insurance, the policy holder needs to pay some compensation monthly or annually for as long as mention in the policy is known as premium.

Nominee

The person who will receive all the assured money after the death of the policyholder is referred as nominee. Thus, a policyholder needs to assign his nominee to avoid any confusion.

Policy Period

The number of years you need security aka the number of years your policy is valid is called a policy period or term.

Paid-up value and Surrender Value

By any chance you end paying your premium after a certain period of time and did not extract the money. It is called paid-up money, whereas if you want to terminate the policy, you will take back your money called surrender value.

Rider

If one wants to enjoy some extra benefits, then there are additional features called riders. Though to enjoy them, you are required to pay more premiums.

Now that you are aware of some basic insurance terms, you need to learn about different types of insurance for better term plans comparison. The decision to purchase insurance is very difficult as all policies and companies say that they are the best, however, it is better to compare them because your whole family's future depends on your one decision. Two basic types of insurance plan are given below-

Life Insurance

This policy provides you security or better security for your family at the time of your sudden death. It provides the assured amount to the nominee assign and hence, give financial stability to them in your absence. It is the most important and commonly purchased insurance.General Insurance- Except life Insurance, all other insurance policies come under general insurance. These policies include medical insurance, education insurance, motor insurance, montage insurance, etc.

In short, it looks after your daily common expenses.

One can get confused with so many policies available in the market. Your loved ones' safety depends on your judgement. Thus, to make a right decision, remember these two points.

Identify Your Needs

The first thing you should ensure is that you know your needs.Why you need insurance? Is it for your life, home, health, education, vehicle or it's just an investment? Once, you are aware of this answer you will know better, which policy will fulfill your requirement and what to buy. If you need term insurance than paying extra money for a whole life insurance is just a waste of money.

Learn About Policy Features

Blindly following your agent advice will prove out to be doomed for you. You need to learn and understand the features of the policy you want to purchase such as maturity date, benefits, price, riders, premium rate, etc. There are many cases where an agent or insurance company might cheat you, so, it is better to be well-informed than fool. Never opt for an agent just because you know them. Go for the one who is trustworthy, knowledgeable and well-known.