Pros and Cons of a term life insurance policy

A term life insurance policy, as the name suggests is a cover on the life of an individual, for a specified period of time. This policy, offers insurance on the life of an individual for a specified term. If the individual survives the length of the cover, he is not entitled to any benefits from it. As in the case of all different insurance covers, this too can be terminated on the non payment of the premiums. Here are some advantages of the same:

1. If you have a term life insurance policy, and you have adequate funds, the life cover of the term coverage policy can be extended to give you benefits of a permanent insurance. Thus, you can convert it into a permanent policy. Apart from getting you peace of mind, you’ll also receive benefits on survival in case you survive beyond the length of the cover offered.
   
   
2. This is a better option available in case you have some liabilities, like a mortgage outstanding and you do not want to pass on the burden of these liabilities to you children after your death. Thus, in case of an unfortunate death, the financial liabilities can be paid off with the money received and hence, it will not be passed on to burden your children.

There is however, s disadvantage in going in for a cover of this kind :

If you are considered undesirable when you go to renew your term life insurance policy after the completion of the term, you might be turned down and then might not have any cover, when you need it the most. There are, however, guaranteed renewal features built in which take care of these factors. Also, you can convert to a permanent cover and hence have the benefits of the same.

You need to consider your cover carefully and hence get the best cover available for yourself.