• zTermLifeInsurance Blog

  • Thursday, July 29, 2010



When do you really need term life insurance, and when do you need whole life insurance? The answer really depends on the financial status of your family and your financial principles. Remember that there is also an option of having whole life insurance with a term rider, which combines the benefits of both.

Life insurance, in general, is meant to safeguard against the financial burden of a person’s death on his family. Yes, it was originally designed only for men, whose death would leave a woman without any sustainable means of income. Similar principles apply even now, although whole life insurance has also become a way to invest money.

If you are relatively young with a working spouse, and do not have kids, term life insurance is likely the best option. This is especially suited for those who have bought a new home, as term life insurance will be very handy in paying off the mortgage in case of an untimely death.

As you grow older, the mix should probably move from 100% term life insurance to a mix of whole life and term life insurance, to 100% whole life insurance. Once debts and mortgages are taken care of, it is best to utilize whole life insurance more. However, this is merely a guideline, and each person’s needs may be different. Make an informed choice to get the best coverage possible for your peace of mind and your family’s.


That overseas assignment suddenly seems near, but the shocker is that you are simply unable to secure term life insurance locally, if you’re going to be living abroad. International term life insurance is probably the most appropriate solution for your situation.

Plans such as IC+ Term Life Insurance offer term life coverage for those who live and work outside their home country. It is the perfect choice if you are looking to get life coverage for just the period that you plan to live abroad.

The IC+ Term Life Insurance plan offers many policy options that include benefits even in case you are diagnosed with a terminal illness. While the policy term can be anywhere from one to ten years, the maximum coverage offered by the plan is $2 million.

Some of the policy options include 100% paid at death, and half the policy limit paid when the plan holder is diagnosed with a terminal illness with less than 12 months to live. The terminal illness can be very important, since it gives the plan holder the time and the funds to take care of all finances before passing on.


Did you know that living a healthy life can have a positive impact on your term life insurance as well? The latest trend in term life insurance is rewarding a plan holder for healthy habits, especially in the area of smoking tobacco.

Traditionally, life insurance premiums have always been higher for smokers, and the latest trend seeks to reward people who have kicked the habit. According to the idea, anyone whose new year resolution is to stop smoking should register for a prompting service, which sends a reminder that the applicant may be eligible for non-smoker rates at the end of the year.

Clearly, if kicking the smoking habit is on your agenda, save the date that you stopped smoking, so that you can remember to review your policy rates at the appropriate time. Some term life plans might not allow you to change your status midway—check with your plan for details.

Term life insurance is a great way to receive extra cover during those periods in time when the need is greatest. While it doesn’t work as an investment, it helps you plan your finances and ensure that your family is still well settled if the unthinkable happens.


Usually, people purchase term life insurance in addition to their whole life insurance. However, there are certain times in your life when you might want to consider purchasing extra term life insurance.

Term life insurance differs from whole life insurance in that it is usually taken for a fixed period of time, and after the period, coverage stops. If there is no claim during the plan period, there is no payout to the plan holder at the end of the plan. It is a very inexpensive, convenient and handy plan for some periods in life.

Term life insurance works as great coverage throughout the period of your home mortgage. For most people, that is their greatest financial worry, and that extra coverage when the mortgage is on will ease the stress on the plan holder and his/her family. It is also great coverage when saving for a child’s college education.

Another period that term life insurance is extremely useful is when you are an expatriate. Your regular life insurance might not cover you for the full amount when you are living and working abroad. Such a period just cries out for international term life insurance, which can be purchased in the U.S., but is valid internationally. So, what’s your excuse?


Term life insurance is not the same as regular whole life insurance. While both pay out a certain sum of money in case of the death of the insured, term life insurance works very differently. It insures a person for a specific period of time only—say three years or five years.

When the term expires, the insured must look for coverage elsewhere, or renew the policy at the current rate—i.e., the rate is by no means fixed. Term life insurance is generally useful in case the applicant wants a higher value of insurance for a certain period—say, until his/her child finishes college, or a home mortgage is paid up.

While whole life insurance covers a person throughout their life, term life insurance is fixed in the period of coverage. Also, whole life insurance eventually pays out—whether you live to be a 100 or 25. However, only1% of term life policies end up paying out.

Term life plans offer great value for money. Less expensive than whole life insurance plans, they are ideal for periods in life where just that extra coverage is needed. It is also helpful for people who need life insurance for short periods that they are out of the country, if their whole life insurance is not valid during life abroad.


Many a time, when it comes to term life insurance, the basic question people end up asking is: Do I even need term life insurance? While it is most common for those with dependents and a steady income to take out term life insurance, it is by no means only confined to that demographic.

What you might actually want to ask yourself is: “How will my dependents be financially when I’m gone?” If you really don’t care, or actually have no dependents, you may not want to purchase term life insurance. However, premiums increase as you age, and so, if you decide to purchase insurance when you’re older, you’ll find that your premium has skyrocketed.

If you are still not sure that you need life insurance, consider the very probable case of Mr. Tom Morais. He figured that with a wife who earned as much as he did, there was no need for life insurance. But one horrible accident later, his medical bills began to pile up.

The bills far exceeded what Mr. Morais’s insurance would pay, and when he passed on, his wife was stuck with an astronomical medical bill. To pay off the debts, she had to sell the house, and rued the couple’s decision to forego term life insurance!


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