Term Insurance - Ashish

Term Insurance Explained: What, Why and How

Term insurance is a pure risk cover product. It pays a benefit only if the policyholder dies during the period for which one is insured. Term life insurance provides for life insurance coverage for a specified term of years for a specified premium. The premium buys protection in the event of death and nothing else.

The three key factors to be considered in term insurance are:

  • Sum assured (protection or death benefit)
  • Premium to be paid (the cost to the insured), and
  • Length of coverage (term).

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