Which of the following best describes term life insurance?

Asked by: Mr. Ethel Greenholt DVM  |  Last update: May 2, 2023
Score: 4.9/5 (13 votes)

Correct option is (B) The insured pays a premium for a specified number of years. The following best describes term life insurance: The insured pays a premium for a specified number of years.

What is meant by term insurance definition?

Key Takeaways. Term insurance is a type of life insurance policy that provides coverage for a certain period of time or a specified "term" of years. If the insured dies during the time period specified in a term policy and the policy is active, a death benefit will be paid.

What is the purpose of term life insurance?

Term life insurance offers a death benefit, which is intended to help your beneficiaries replace your income if you pass away. For example, the money can be used to help pay for things like a mortgage, education costs or everyday expenses, such as groceries.

What is policy term in term life insurance?

Policy term refers to the period for which your term insurance policy will remain active. This term is determined at the time of purchasing the insurance plan. It is used to refer to the period during which the life insured is provided guaranteed coverage by the insurer.

What is the difference between term insurance and life insurance?

Term life is “pure” insurance, whereas whole life adds a cash value component that you can tap during your lifetime. Term coverage only protects you for a limited number of years, while whole life provides lifelong protection—if you can keep up with the premium payments.

which of the following best describes term life insurance ~ know whats best for you

20 related questions found

What is term plan insurance Quora?

Term insurance plan is the simplest form of insurance, which in case of a policyholder's demise, ensures that the family gets the sum assured. It offers risk coverage for the duration of the policy Term. The Sum Assured is paid to the beneficiary who is nominated by a policyholder.

Which of the following is characteristic of term life insurance?

The two principal characteristics of term insurance are: the insured must die for any benefits to be paid and, by definition, the contract expires at the end of the term.

What are the types of term insurance?

Types of term insurance
  • Level Term Plans. The default life insurance coverage provided by most insurers in India is a level term plan. ...
  • Increasing Term Insurance. ...
  • Decreasing term insurance. ...
  • Return of Premium Term Insurance. ...
  • Convertible Term Plans.

Which of the following is a benefit of term life insurance?

Following are the primary benefits of term life insurance that you can avail by buying term insurance: High Sum Assured at Affordable Premium. Easy to Understand. Multiple Death Benefit Payout Options.

Which of the following is an advantage of term insurance?

Less expensive

On average, life insurance rates are more affordable for term than whole life insurance because term policies offer coverage for a predetermined time. If you outlive the term and the policy expires, your beneficiaries don't receive the death benefit, so it's less of a risk to the insurer.

What are the benefits of having term insurance?

Term insurance plans offer financial security for the entire family in case of the unfortunate death of the policyholder. Also, you can get optional coverage for critical illnesses or accidental death. You are covered for a long duration, while the premiums are affordable.

What is term life insurance in simple words?

A term life insurance policy is the simplest, purest form of life insurance: You pay a premium for a period of time – typically between 10 and 30 years – and if you die during that time a cash benefit is paid to your family (or anyone else you name as your beneficiary).

Are term insurance plans good?

A term insurance plan will help the family to meet their day to day expenses and accomplish the long-term financial goals too. Yes, it is worth buying a term insurance policy no matter what year it is. When compared to other types of life insurance products, a term insurance policy is much beneficial.

What is term life insurance return of premium?

Return of premium (ROP) is a type of term life insurance policy that provides a death benefit to your beneficiaries if you die during the term of your policy, but refunds the premiums you've paid if you outlive the policy term.

Is term life insurance worth getting?

Term insurance is most appropriate for young and healthy families with significant, temporary financial needs that must be covered should the family's breadwinner pass away. However, anyone with a temporary financial need for life insurance protection can benefit from term life coverage.

Which of the following is the key characteristic of term life insurance quizlet?

Term life insurance provides pure death protection (pays a death benefit only). Whole life insurance (permanent protection) provides life insurance for the entire life of the insured. It also is said to provide a living benefit because it accrues cash value, which is available to the policy owner.

Which of the following is not a feature of term life insurance?

Cash surrender value term life insurance has no cash value and is often referred to as providing pure protection.

What is term insurance and life insurance Quora?

The. Term insurance is a life insurance policy that provides cover against the risk to the insured's life for a fixed period of time or “term” of years. It pays a death benefit to the nominee chosen by the insured in case of the death of the insured during the term of the policy.

How term life insurance works Quora?

Term life insurance is a policy that lasts for a set amount of time (hence the word term). Typically, these policies last for 10, 20, or 30 years. The policy provides life insurance coverage during that time period. Once it reaches the set period determined by the insured, it expires.

Why term insurance is important Quora?

Some of the benefits of buying a term insurance policy. Helps you meet your long-term financial goals. Provides a financial cover to your family in case of your untimely demise. As compared to other insurance policies, a term plan has more flexible premium payment options.

Which is best life insurance or term insurance?

Those looking for long term life coverage should opt for whole life insurance. It has guaranteed death benefits. The policy holder's loved ones may use the plan corpus to meet their financial goals. Whole life insurance is more expensive than term insurance, since there is also a cash value component attached to it.

How long is term life insurance?

How long is term life insurance? Term life policies are generally sold in lengths of five, 10, 15, 20, 25 or 30 years. In some cases, you can find 40-year term life insurance. The longer the policy, the higher your life insurance quotes are likely to be.