Term Insurance
Term life insurance is cover provided under an agreement to pay a death benefit (the sum assured) only if the death of the insured occurs during a specified period of time that is the term covered by the policy.
Under a term life insurance policy, if the insured dies during the period covered by the policy, the death benefit is payable (subject to policy conditions) .If the insured survives to the end of the period no benefit of any kind is payable and the policy will terminate (or expire).
In this respect, term life insurance is very similar to non-life insurance. Under either kind of coverage, if there is a loss during the period covered, the claim is paid; if there is no loss, the policy owner will have not received what he paid for, i.e. the assurance that if there had been a loss, it would have been covered.
Term life insurance policies
- 1-year term for groups, 5-45 years
- Term to age 55
- Term to age 60
- Term to age 65 for individuals
Sum Assured Classification
level-term
Under a level term policy, the sum assured remains constant throughout the period of insurance.
Decreasing term
Decreasing term policy, the initial sum assured decreases periodically (every month, quarter, half year or every year).
Increasing term
Increasing term policy, the initial amount of insurance increases every year at a rate determined in advance.