Term Life Insurance

What is Term Life Insurance in Netherlands?

Term life insurance is a type of life insurance policy that provides coverage for a specific period, or "term." If the policyholder dies during this term, the insurance company pays a death benefit to the beneficiaries. Unlike whole life insurance, term life insurance is generally less expensive and does not accumulate cash value.

Key Features of Term Life Insurance in Netherlands

• Family’s Financial Security: With the payout from term life insurance in the Netherlands, you can pay for the child’s future education, take care of monthly financial needs, and pay off any remaining loans you may leave behind.

• Fixed Term Length: Term life insurance (gelijkblijvende overlijdensrisicoverzekering) can last for a specific number of years, typically ranging from 10 to 30 years.

• Death Benefit: A lump sum payment is made to the beneficiaries if the policyholder dies during the term.

• Affordable Premiums: Generally lower than those for whole life insurance, making it accessible to more people.

• No Cash Value: The policy does not build up savings or investment value.

Benefits of Term Life Insurance in Netherlands

• Financial Security for Loved Ones

  The primary benefit of term life insurance is the financial protection it offers to your family. The death benefit can be used to cover living expenses, pay off debts, and ensure your loved ones maintain their standard of living.

• Cost-Effective Coverage

  Term life insurance is usually more affordable than other types of life insurance, such as whole life or universal life insurance. This makes it an attractive option for those on a budget who still want to provide significant protection for their families.

• Flexibility

  You can choose the term length that best fits your needs, whether it's until your children are grown, your mortgage is paid off, or you reach retirement age.

• Simplicity

  Term life insurance is straightforward, with no complicated investment components or cash value considerations. You pay your premiums, and if you pass away during the term, your beneficiaries receive the death benefit.

• Customised Cover

  With gelijkblijvende overlijdensrisicoverzekering, you can not only customise the cover amount as per your needs but also cover your partner within the same policy as well.

How Term Life Insurance Works in the Netherlands?

In the Netherlands, term life insurance is known as "tijdelijke overlijdensrisicoverzekering." Here’s how it generally works:

1. Choosing a Policy

   • Determine Coverage Needs: Assess how much coverage you need based on your financial obligations, such as mortgage, children's education, and daily living expenses.

   • Select Term Length: Choose a term that matches your financial goals and obligations. Common terms range from 10 to 30 years.

   • Compare Providers: Look at different insurance companies to compare premiums, coverage options, and customer reviews.

2. Applying for a Policy

   • Health Evaluation: Most insurers will require a health evaluation, which may include a questionnaire and a medical exam.

   • Premium Calculation: Your premiums will be based on factors such as age, health, lifestyle, and the length and amount of coverage.

   • Policy Approval: Once approved, you’ll start paying premiums to keep the policy active.

3. During the Policy Term

   • Premium Payments: Pay your premiums regularly (monthly, quarterly, or annually) to keep the policy in force.

   • Policy Updates: Review your policy periodically to ensure it still meets your needs, especially after major life events like marriage, the birth of a child, or purchasing a home.

4. Claiming the Death Benefit

   • Filing a Claim: If the policyholder dies during the term, beneficiaries must file a claim with the insurance company.

   • Receiving the Benefit: Once the claim is approved, the insurance company will pay out the death benefit to the beneficiaries.

Factors to Consider When Choosing Term Life Insurance in the Netherlands

• Coverage Amount

  Choose a coverage amount that adequately covers your financial obligations and provides for your family's future needs. A common rule of thumb is to have coverage that is 10-12 times your annual income.

• Term Length

  Select a term length that aligns with your financial goals. Consider the age of your dependents, the length of your mortgage, and other long-term financial obligations.

• Premium Costs

  Compare premium costs among different insurers to find an affordable policy. Remember that premiums are usually fixed for the term of the policy.

• Health and Lifestyle

  Your health and lifestyle can significantly affect your premiums. Non-smokers and those in good health typically pay lower premiums.

• Additional Benefits

  Some policies offer additional benefits, such as critical illness coverage or the option to convert to a whole life policy later on. Consider these options if they meet your needs.

Alternate Ways to Buy Term Life Insurance in the Netherlands

NRIs living in the Netherlands can buy term life insurance for NRIs to ensure the financial security of their loved ones back home in India. 

1. Benefits of Buying Term Insurance for NRIs from Indian Insurers

   • 18% GST waiver on premiums as well as 5% additional discount on annual mode

   • Premiums are much more affordable in India than international term plans

   • Global coverage with pre-approved cover that offers long term protection

   • Tele/video medicals reduce the hassle of travelling back to India just to clear their medicals

   • Special exit benefit allows you to exit the plan early and receive all the premiums you paid back

2. How to Buy Term Life Insurance for NRIs from India?

   Here is how NRIs can buy term life insurance from Indian insurers:

   Step 1: Visit Policybazaar’s term life insurance for NRI page 

   Step 2: Fill in the required information like your name, gender, and contact details

   Step 3: Select the suitable smoking habits, occupation type, annual income, and educational qualifications

   Step 4: Choose the most suitable term life insurance for NRI and proceed to pay

Wrapping it Up!

Term life insurance is an essential part of financial planning for many people in the Netherlands. It offers affordable, straightforward coverage that provides significant financial protection for your loved ones. By understanding how term life insurance works, its benefits, and the factors to consider when choosing a policy, you can make an informed decision that ensures the financial security of your family.

You can also read : Life Insurance Calculator in Netherland