Term Life Insurance
A discussion of cheap and flexible term life cover options.
Term life assurance is the simplest form of life cover. It has no investment value, and if you survive the term there’s no benefit payable. But, these policies are therefore usually fairly cheap, and there are plenty of options which can add extra value where you need it.
Term life insurance is the most basic form of life insurance available. Unlike whole of life policies, which cover you for the rest of your life and are therefore guaranteed to pay out (because at some stage, like it or not, you will die), term life insurance policies are only valid for a specific term. If you do not die during that term (usually five, ten or twenty years), then the policy pays nothing and has no value. Because whole of life policies are eventually bound to pay out, you can consider them to be investments. Because term life insurance will not pay out if you survive the term, you can consider them to be a classic insurance policy.
However, this does mean that term life insurance policies are generally cheap and cheerful, and because they’re easy to understand, you can often shop around with impunity (and there’s a wide range of products on offer). Consider an inflationary increasing term policy if you want to index-link the benefits. Consider a renewable policy if you think you might like to extend it when it expires. But for anything less than ten years (unless you’re in your 50’s or older), a plain vanilla policy will almost certainly serve you right.
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