Term insurance is a form of life insurance that pays benefits when the insured dies during the contract term. The insurance company will pay the insurance amount to the beneficiary if the insured event occurs. This type has lower premiums than whole life insurance. The article below will analyze in detail the characteristics, benefits and principles of implementing a death insurance contract.

What are term insurances?

Term insurance is life insurance that pays benefits when the insured person dies during the contract term. This is the most basic form of insurance in the field of life insurance.

According to the Law on Insurance Business 2022, life insurance includes types of insurance in case the insured person lives or dies. Term insurances belong to the insurance group in case the insured person dies.

Main features of term insurance:

• There is a specified insurance period
• Insurance premiums and insurance benefits are lower than whole life insurance
• The premium payment term may be shorter than the contract term
• There is no cumulative or redeemable value
• There are no maturity benefits upon contract expiration

The insurance company only pays insurance benefits if the insured dies during the term of the insurance contract. If the insured is alive at the end of the contract, the policyholder will not receive any money back.

Types of term insurance

Term insurance comes in many different forms to meet the diverse needs of customers. The three most common types are fixed term insurance, decreasing term life insurance and increasing term life insurance.

1. Fixed term life insurance is the most common form. The insurance amount and premium do not change throughout the contract term. This type is suitable for those who want to ensure a stable level of protection.
2. Decreasing term insurance has the amount of insurance decreasing over time. Insurance premiums usually stay the same or decrease accordingly. This type is often used to protect loans such as home loans.
3. Increasing term insurance has the amount of insurance increased over time, often to cope with inflation. Insurance premiums may increase accordingly. This type helps maintain real protection value over the long term.

There are also some other special types such as renewable term insurances and convertible term insurances. Customers should carefully consider their protection needs and consult with experts to choose the most suitable type.

Benefits of term insurances

Term insurances bring many practical benefits to both individuals and businesses. This is an effective financial tool to protect loved ones against risks.

The main benefits of term insurances include:

• Financial protection for loved ones: Insurance payments help beneficiaries maintain their lives when they lose their main source of income.
• Reasonable cost: Insurance premium is lower than other types of life insurance, suitable for many people.
• Flexibility in choice: Participants can choose the insurance amount and term to suit their needs.

For businesses, group death insurance helps protect finances when important personnel are lost. Insurance money helps businesses stabilize operations and find replacement personnel.

Term insurances are also an effective means to create inheritance for future generations. Insurance benefits ensure that children receive financial support even if their parents unfortunately pass away early.

Principles for entering into and implementing death insurance contracts

The conclusion and implementation of term insurance contracts comply with the principles specified in Article 16 of the Law on Insurance Business 2022. These principles ensure transparency and protect the interests of participating parties.

The principle of absolute honesty requires the parties to provide information and perform their obligations in the most honest way. This creates a foundation of trust between insurance businesses and insurance buyers.

The principle of insurable interest stipulates that the insurance buyer must have a legal interest in the insured object. This prevents insurance abuse.

The indemnity principle limits the amount paid to no more than the actual damages, unless otherwise agreed. This applies to non-life insurance, not term insurance.

The principle of subrogation allows the insurer to replace the insured to claim compensation from the third party that caused the damage. However, this principle does not apply to life insurance.

The principle of contingent risk stipulates that insured risks must be unexpected and unforeseen events. This eliminates intentional risks.

Support and consulting services on death insurance at Long Phan

Long Phan provides professional consulting services on death insurance. Our team of experienced experts will analyze your needs and propose the most suitable insurance package. We will support customers throughout the insurance process, from product selection to settlement of insurance benefits. Our services include:

• Consulting on insurance term, insurance fee, insurance benefits
• Consulting on withdrawing money from insurance contracts, supporting changing insurance points
• Consulting on handling contract expiration and death insurance claim procedures

Term insurances are effective financial tools to protect loved ones and businesses. For detailed advice on the most suitable product, please contact the hotline 0906735386 by Long Phan. We are ready to assist customers in building a comprehensive financial protection plan, bringing peace of mind to customers and their families.