Term Insurance

Term insurance is a life insurance policy running fr a specified period of time, during which the insured party feels there is a financial risk such as loss of income or repayment of a debt.

Term insurance policies are a way of ensurig that in the event of death of a person there is suffieicent money withind the estate to provide for thos dependent on the prerson. This type of policy is generally not suitable for things such as estate planning or funeral planning due to the risk that the policy could expire before the person dies, leaving the cost uncovered by insurance.

Various terms can be taken for a term insuramce policy ragging from 1 year to 40 years - the term is agreed between the individual and the insurance company.  Most term insurance policies are calculated in whole years

During the period of insurance if the insured party dies then the insurance company will pay out the amount they are insured for.  After the period of insurance a term insurance policy will expire and at that time the individual would not receive any benefit if they died, the individual would then need to decide if they need to replace the insurance.

Types of term insurance include:

• Level term insurance where the amount of cover or benefit remains the same throughout the term of the policy
• Decreasing term insurance where the amount of cover or benefit reduces over the term of the policy
• Increasing term insurance where the amount of cover or benefit increases over the term of the policy – often lined to inflation or retail price index

Many term insurance policies will offer other features such as:

• guaranteed premiums, where the premium of the policy is set at the start of the policy and does not change during the term
• guaranteed insurability meaning the insured party can increase the value of their term insurance policy during its term without being subject to further underwriting – individual term insurance contracts would specify when and how this can be done.

How much is term insurance likely to cost?

This very much depends on age, state of health, smoker status, pastimes, height/weights ratio and the type and amount of cover you want.  You can use our online life insurance quote system to run as many different quotes as you need.

Back