Term Life Insurance
What is a Term Life Insurance ?
Term life insurance pays a lump sum when the life assured dies during the policy term.
With a term life insurance policy the insurance company insures the life's assured for a specific number of years, which is known as the term.
When the policy comes to the end of the term the cover will cease. If the policyholder still requires cover they will have to take out a new policy.
This can be beneficial as a shorter term can reduce the monthly premiums. One thing to consider when considering a short term plan to save money is that if the policy holder has developed a serious illness such as cancer or a heart problem.
If this was to occur the insurance companies might not be willing to insure you. If they are willing to provide cover, the premiums could be so high that the insurance will simply be un-affordable.
Affordability of Term Life Insurance
Since term life insurance policies will often expire without the need for the insurer to pay a death benefit, the cost of term life insurance is typically a lot lower than the cost of a whole life policy. Affordability is term life insurance’s main advantage.
Why Have Term Life Insurance ?
The main reason to take out a term insurance policy is peace of mind, here’s an example:
If someone has recently started a family, they have the option of taking out a 20 or 30 year term life policy, and can be safe in the knowledge that their family will be provided for in the unfortunate event of anything happening to them during that period. After the policy finishes, when children are grown up, the mortgage is paid off and the prospect of retirement is looming, you could argue that life insurance is no longer critical. The term life insurance policy will have served its purpose.
Term Life Insurance Premiums Should you Have Reviewable or Guaranteed Premiums ?
Providers of term life insurance will typically give you the option of having your premiums on a reviewable or guaranteed basis.By selecting a policy on a guaranteed premium basis then you will have the same payments for the duration of the policy.
If you opt to go for reviewable premiums, your policy will typically have a review date of of 5 years. At this point the claims history will be looked at by your insurer and your premiums could increase. You will however not be asked to provide any additional medical information so will not be penalized for any health problems that have occurred since the beginning of your policy and subsequently your premiums will not be affected.
Term Life Insurance Options
Most term life insurance providers will also give you the ability to include certain options in your policy, for example:
- Increasing Benefit
- Integrated critical illness cover
- Additional critical illness Cover
- Waiver of premiums
Term Life Insurance Advice
If you would like to take the hassle and confusion of finding the best term life insurance our professional financial advisors can help you with all the different life insurance options. Simply complete our life insurance advice form and advisor will call you to discuss your term life insurance needs.
