Buying life insurance is
an important financial decision that every person. It ensures lost income
covered and supporting the family financially until they get other sources of
income when policyholder meet financial trouble in emergency case. Many people fail
to purchase insurance because they consider it an expensive undertaking.
However, with the term policy insurance has made it become more affordable to
public. When the term has expired, you are liberty to renew the policy, but if
you choose not to renew the policy you will able to access the benefits once
the term matures.
Term insurance policyholder will benefits
to obtain cash benefits if they diagnosed with terminal illness. This give the
policyholder an opportunity to use the money cater for treatment among other
expenses and helps to cushion loved once by saving to pay high medical cost.
Therefore, term policy is recommend for people who have a short time to live.
For further explanation, let looks out some of the features for term insurance.
life only provide pure death benefit
Entire purpose of a term
life policy is the death benefit. Term life insurance will only give a single
lump sum of payout as death benefit to the person or entity that you designated
as your beneficiary when the policyholder is die. This payout can used as the
future income for the beneficiaries to maintain their life before that they
depend on the policyholder. By comparing premium and coverage with other types
of policy, term life insurance policy would pay policyholder a very high cover
for very low premiums to help beneficiaries of policyholder reduce the burdens
on financial difficulties. Unlike whole life insurance, it provides both the
permanent protection and the cash value. If you want to get return from insurance,
you may consider the whole life or investment link life insurance. Below are
the essential overview of term insurance for death benefit.
Death benefit the whole purpose that you
have a life insurance policy to payout an amount of money to your beneficiary.
Term is an amount of time, period of a time that the price of your policy
cannot change. No matter what happens with your health, or anything like that,
the face value of the amount of money that the policy will payout as the death
benefit if you were to pass away and finally your beneficiary is who gets the
money if you pass away.
premium paid will increase in accordance with age
The premiums of term life
insurance always increase every year. This is because of the escalating risk of
death as the policyholder ages increases. All the life insurances will face the
problem of mortality but the difference is the whole life policyholder only
need to pay level premium throughout the policy as the one he paid initially.
If you consider the level premium, the whole life insurance is suitable to
purchase. Disadvantages for term policyholder that only want the temporary
coverage of protection.
cash value provided
Term life insurance
cannot accumulate wealth like investment link life, whole life and variable
life insurance. When the term policy is expired, there is no more protection
unless you renew the policy. The premium paid is functions to claim the death
benefit for beneficiary. It is pure life insurance without providing cash
value. If there is no death occurs, the insurer will not give any payout. On
the other hand, it is cheaper than whole life because it only provide
protection on specified term and no cash value given. If you consider a cheap
and coverage life insurance, term life insurance is the most suitable.
entered a term policy contract, you need to pay a fixed amount of premium until
the end of the maturity to ensure your beneficiary get coverage when the time
policyholder has passed away. The value of the policy
does not change over time during the term that you have chosen. For example, 20
years term policy priced at RM40.00 per month would stay RM40.00 for 20 years.
Insurance company could not change the price on you no matter what happen to
your health or anything like that until the end of maturity. It does not rise
with inflation or any other type of measure for many individuals. This type of
cover is ideal keep in mind that this type of life insurance is also a term
policy. This means that the policy is in effect for a specific length of time
as defined in policy terms. Term life insurance
policies contain seemingly countless provisions, clauses and options the policy
is always renewable premiums are fixed calculated. As a term life insurance
policy it represents contract between the insurer and insured, premium is fixed
based on age of issue.
The features of term life
insurance is eligible for tax deductible. Term insurance has protection by
Lembaga Hasil Dalam Negeri (LHDN) under sections 33 and 22 Income Tax Act,
1967 and exempted from Goods and service
taxes (GST) based on section 5 of the Insurance Act, 1996. Tax relief for term life insurance is RM3,000
because the premium paid on medical policies or education policies. Tax relief
for term life insurance can combined with approved retirement funds like
Employees Provident Funds (EPF). The requirement for tax relief is must filled
in Borang BE to claim it from income tax. Based on the real facts, tax relief
for insurance is limited to maximum amount of RM6,000 no matter is claimed by
qualified individual or spouse relief. For example, if Deen paid RM4,500 for
insurance and RM3,000 for his husband, the total amount of tax relief is
RM6,000 which is the maximum amount limited by Life Insurance Association of
Malaysia. If they opt to make a separate assessment, both Dylan and his husband
entitled to RM6,000 tax relief for insurance individually.
to buy adequate cover due to affordability
Malaysia can help you to build a policy ideal for your life circumstance. Term life insurance premium is 3 to 4 times cheaper than
other types of life insurance available in the market. Everybody can afford
such a policy and continue throughout the term. Thus, it does not matter
whether you are 30, 50, or even more than 80, you will always find a preferable
one for your needs. Even before a policyholder converts the term insurance into
whole-life insurance, the policy will be more expensive. The coverage offered
by a standard term insurance policy and that by a convertible policy may be the
same. However, the convertible insurance plan will have higher premiums, owing
to the built-in cost attributed to the conversion facility.
buy a convertible policy now if you are unable to afford whole life insurance.
In the future even if you are able to buy whole life insurance, your health may
disqualify you from doing so. In effect, you choose the affordable insurance
now while also creating a path to the lifetime option in case your insurance
needs and health condition changes over time.