Term life insurance

Term life insurance provides a specified amount of life insurance for a specified period of time. You will select the sum insured and the term of the policy when you take the policy out. If you pass away within the term of the policy, it will pay out the agreed sum insured that you selected.

Many people choose to take out a policy to cover the costs of a mortgage for their loved ones if they were to pass away. By paying a monthly premium, you can make sure that your family’s outgoings or mortgage can be covered. Alternatively, it could be used to help pay off debts, cover funeral costs or simply to support your families future.

What’s the difference between decreasing and level term life insurance?

• Level-term life insurance provides you with a fixed amount of cover at all times while the policy’s in place. This type of policy might be suitable to pay off the outstanding capital on an interest only mortgage.

• With a decreasing term life insurance policy, the potential pay-out becomes lower (decreases) over time. This type of life insurance is mainly used to pay off any outstanding mortgage capital the idea being that this also decreases over time as you pay off the capital. Because the amount potentially paid out decreases over time it is also usually cheaper than level term, but remember you should choose the policy that’s right for you –it isn’t all about the price.

How many years of cover you need will depend on your own personal circumstances and what you want the cover for. Maybe this will match up with the time left on your mortgage – in which case it might be 25 years for example. If you want the cover to provide a lump sum for your family, then you might think want to think about how many years until your children might be independent and no longer need your financial support.

If you pass away within the policy period, the policy will most likely pay out (Life insurance has a very high pay out rate on average 98.2% of claims are paid). If the policy period expires and you’re still alive, the policy simply lapses. Similar to other types of insurance you won’t get any of your money back and it is then up to you whether you wish to renew the policy or seek out an alternative form of cover.

Yes. These are known as life assurance policies or whole of life policies. Unlike term policies these don’t expire and pay out on your death. They tend to be more expensive than term life insurance products.

Some insurance providers will offer term insurance for people that are over 50 but it is more common to take out a product specifically designed for that age group.

It works differently to term life insurance so if you think that this type of policy would suit you better, then we can help you find a policy by using our over 50s Life comparison service.

There are a number of factors that will affect the overall price of your policy. When applying for a life insurance policy, the insurance provider will base the price on things such as:

• Your medical history
• Your lifestyle
• Your employment
• Your age
• Whether or not you smoke
• The sum you want insured
• The policy term

Because there are so many variables and each insurance provider assesses the variables in different ways, the term life insurance quotes you receive can be quite different.

Comparing life insurance quotes from the leading life insurance providers could be a time consuming and laborious task. Fortunately, we’re here to make the whole process really simple. Go to our comparison page today and we’ll help you find the best policy for you.