Term Life Insurance: Useful or not?
Especially families with only one main earner should think about the death protection. Anyone who has doubts about whether a term life insurance makes sense for him, should ask two simple questions:
- What financial burdens arise for the loved ones or surviving dependents, if their own income is eliminated by the death ?
- Can the income loss be compensated for months by other income?
If there is no satisfactory answer, hedging through a term life insurance makes sense.
For whom is a term life insurance useful?
The conclusion of a term life insurance is advisable if survivors are financially under enormous pressure due to a death , for example due to installment payments for a loan that suddenly can no longer be serviced. If, for example, the sole earner of a family dies, the term life insurance covers an important existential protection for them. To the deep mourning over the loss of the beloved man is not added so nor the concern for the money or the existence .
A term life insurance is also worthwhile for unmarried couples. After the death of the partner, they are not entitled to a widow’s or widower’s pension by law . If both partners contribute to the income, they can mutually protect each other through an associated term life insurance.
Service: From just a few euros a month you can secure a sum insured of one hundred thousand euros or more. With the non-binding tariff calculator for term life insurance, you can still find a suitable protection from a variety of offers, which is good and cheap.
Term life insurance is also suitable for business partners
A term life insurance is also useful for business partners. Because especially in the start-up phase a company can threaten the end by the loss of the partner by his death . Furthermore, term life insurance can serve as a hedge for a loan . Survivors can continue to repay existing loans for, for example, building a house or buying a new car.
Term life insurance: Early completion makes sense
The term life insurance is calculated on the basis of a few personal factors such as health status, body weight, occupation exercised, way of life of the customer as well as duration of contract and sum insured. Age is also crucial. It is therefore advisable to take out term life insurance early . Young, healthy non-smokers often pay significantly lower contributions than, for example, older people with pre-existing conditions or smokers.
Truthfully answering health questions
Before conclusion of a term life insurance the state of health of the applicant is requested. It is necessary to answer the health questions truthfully. Otherwise, the insurer has the right to refuse benefits.
Risk life insurance: test winners deliver convincing offer
For example, the Institute for Pension and Financial Planning has determined in March 2017 which term insurance is suitable for financial statements. Non-smokers were impressed by Deutsche Lebensversicherungs-AG and Dialog with their offers.
Further term life insurance tests offer interested parties a first orientation and provide an overview of suitable rates. In addition, it makes sense to include your own needs in the selection and to make the decision for a specific insurer not only dependent on the test winner.
Term life insurance makes sense? Disadvantages of the survivor’s protection
The term life insurance has a few disadvantages that interested people should be aware of. Thus, the insurance serves as a pure death protection . There is no capital that will be paid out at the end of the contract. This only offers a life insurance. With it, insured persons combine risk protection with old-age provision.
Another disadvantage arises for persons with pre-existing conditions or an unhealthy lifestyle . They usually pay more for their term life insurance. For smokers, the hedge often costs two to three times as much as for nonsmokers.