Wondering what is term life insurance? If we try to define a term life insurance in simple words, it turns out to be an insurance taken for a specified period of time. Such an insurance policy will pay a death benefit to the insured but will not account to any cash build up. Most term life insurances are renewable at the end of the specified term. Discussed below are the advantages and disadvantages of taking a term life insurance policy.

Advantages of taking a term life insurance

A term life insurance scheme offers you the freedom to buy insurance when you require it the most. In addition to this the premiums of this kind of insurance are very low which will allow you to take greater coverage. A term life insurance is the best kind of insurance in case you require it only for a specific period of time. This is more of a need generated insurance than a regular one that is mostly investment driven.

Disadvantages of term life insurance

The disadvantage of a term life insurance or group term life insurance is the fact that it does not build any cash value as in case of a regular credit life and disability insurance scheme. As most term insurances are of increasing kind the premiums may increase over the term of the insurance making it more expensive over the time. This can also make it difficult to continue the insurance after the term gets over.

Though there are certain disadvantages they can be ignored as this is basically a need driven insurance policy. Anyhow it is always better to carefully evaluate what is term life insurance and your benefits and drawbacks before taking a term life insurance.