Term Life Cover

The Varied Choices Provided by Term Life Cover

Term life cover is one of the most affordable life insurance policies that you can invest in so it is easy to fit into the budget even during these hard times. It is also one of the easiest to comprehend as it is for the most part, a straightforward policy that isn�t inundated with many intricacies.

Definition

Term insurance provides you with protection for an agreed term, usually between five to 30 years depending on your specification. Should you perish within the period that you are covered or if you are diagnosed with a fatal illness, your family receives an assured sum, also referred to as the death benefit. If you survive, you get no payout and the policy expires at the end of the term.

Types of Term Insurance

There are a few types of term insurance to choose from and your choice will depend on which type of cover best suits your particular circumstances. Decreasing term insurance affords you fixed monthly premiums but with decreasing sum assured so that upon your death, the lump sum payout would be less than what you initially specified. The benefits from this cover are typically used to pay off mortgage debts.

Under index-linked term life cover you have the option of increasing your monthly premiums each year in accordance with the UK retail price index. This is so you can be sure that the amount of money that your family receives will be sufficient to cover their needs.

Renewable term insurance allows policy holders to renew their policies without the initial terms and conditions being subject to another round of evaluation. You will not be required to go for another health check, for example.

Convertible term insurance, as the name suggests, is an exchangeable policy. If at a later date, you wish to convert your term cover into a whole life policy or endowment insurance, you are allowed to do so. Both whole life and endowment insurance have a cash value.

Term Insurance with Critical Illness Cover

You can also choose to incorporate critical illness into your term life cover. Once you are diagnosed with a critical condition, your policy will pay out. This extends the range of your coverage as you will be able to claim money once you are unable to work due to your illness. Further, there are many ailments covered under this type of policy although the list may vary with each insurance agency. Make sure to inquire thoroughly about the conditions that are included in their package.