Meaning of 20-Year Term Life Insurance
The 20-year term life insurance policy is a class of life insurance and particularly a part of term life insurance policy. It is a type of life Insurance policy that provides coverage for you for a specific term of 20 years just as the name implies.
The major essence of this policy is to ensure that there is an insurance cover in place in the event that the unexpected happens to you within the period of 20 years It’s like having a safety net for your loved ones just in case of eventualities like death comes calling.
How 20 year Term Insurance works
When you want to buy 20-year term insurance policy, the first thing you need to do is to approach the insurance company to discuss the terms. The terms as will be discussed will include the premiums payable which is the life wire of every insurance policy.
The premiums as has been agreed by you and your insurer may be payable monthly or as otherwise agreed but usually monthly. Remember that payment of premiums are in advance and not in arrears to the insurance company.
In return, the insurance company undertakes to pay out a lump sum (death benefit) to your beneficiaries if you die within the 20 years.
It is worthy of note that the premium payable on the policy remains the same throughout the entire 20-year term or period.
Benefits of 20-Year Term Life Insurance
Provides Family Financial Protection:
One of the major reasons people buy purchase this type of term life insurance plan is because they want to ensure that their family do not suffer financially upon their death by providing a sort of financially security with the death benefit accruable from their insurance policy.
Thus, in the event the policyholder dies within the 20-year term, the death benefit of the policy will help cover things funeral, mortgage payments, daily expenses, and even education of beneficiaries.
Cheap Premiums:
Generally, the premiums payable on a 20-Year Term Life Insurance policy are usually affordable in comparison to permanent life insurance policy options. Therefore, it is accessible for many individuals and families especially low income earning families.
Its Flexible:
This type of life insurance policy makes it easy for you with respect to planning your finances as a result of its flexibility. It is flexible because you have a choice to covert the policy to a different type of life insurance, renew it, or let it expire after the 20-years term if you no longer need it.
Provides Peace of Mind:
Having this type of policy provides peace of mind to the policyholder knowing that there is financial security for the loved once if he dies with the lifetime of the policy.
Conclusion
From the foregoing, you will understand the a 20- year term life insurance policy is a good way to provide financial security for your family in the event of your passing.
Remember that you have the duty to pay consistent premiums through out the 20 years term and in return, the insurance company will pay out a lump to your beneficiaries to help them through.
Buying this policy is good choice you will make so as to guarantee you peace of mind. It also provides flexibility in its workings and provides you a good financial planning.
Finally, do not forget to assess your individual needs and consult with an insurance agents or professional to advise on the best kind of policy for you or your family members.
