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Term insurance pays
a tax free lump sum in the event of death within a specified period of
your choice (referred to as the 'term'). Fixed annual or
monthly premiums are paid for the duration of the term.
As there is no investment element with this form of life insurance, if
no claim is made, there will be no maturity value payable at the
end of the term.
Term insurance is the simplest and cheapest form of life insurance. A
few pounds per month can provide cover for a payout of tens of
thousands of pounds. You are covered for as long as you pay the
monthly premiums. The policy terminates if you stop paying the
premiums,
Term insurance is
available is a couple of different flavours:-
Decreasing
With Mortgage
Protection Insurance also known as Decreasing Term Assurance you pay a
fixed monthly premium but, instead of the life cover remaining level,
it gradually reduces over the term of the policy. It is most commonly
used together with a repayment mortgage and the sum assured reduces
broadly in line with the amount outstanding on the mortgage over the
term. The reducing life cover means that the cost of this type of
policy is lower than that of Level Term Assurance.
Level
Level Term Assurance is the most basic type of life assurance.
For fixed monthly payments, the amount of life cover - also known as
the sum assured - is guaranteed for a fixed term. The lump sum is paid
out if death occurs before the policy ends.
Convertible
Term Assurance. Convertible term assurance plans are those
term assurances that have an option to convert to another type of life
assurance offered by the same provider, such as endowment, without
requiring further medical evidence.
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