Published by Joe Davine on
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Why you could benefit from fixed term life insurance

Taking out a fixed term life insurance will give you an emotional reassurance and will build a financial safety net that will protect your family in the event that you pass on. It will provide a cover for the fixed rates of payments for a relevant period of time.

With these factors to consider, finding the right package can still seem a daunting prospect. However, your peace of mind is only a few steps away.

What Is Fixed Term Life Insurance?

As the name suggests, term plans provide coverage for a set duration. The duration of those fixed terms can be decided by you upon application. Whether it’s five years or 50, you can also pick the set payout. Whether your death comes in the first month of the term or the last, your family will be paid the same amount.

This type of coverage is also known as level fixed term life insurance, as the payout remains stable at all times.

For most people, knowing that the family will be OK should the worst happen is the only real incentive for taking out insurance. So if the worst does happen, at least you’ll die knowing that the financial worries are covered.

Pros & Cons Of Fixed Term Life Insurance

Fixed term packages are among the most popular solutions for applicants of all backgrounds. However, there are positives and negatives to consider. Analysing them in detail is the only way to make a calculated decision.

The Pros

  • This package offers a set payout regardless of other situations. This sense of certainty can be crucial for your peace of mind.
  • The payouts can be built to suit the needs of your family. This allows you to take mortgages, living costs, and other factors into account.
  • You’ll know the full repayment details from day one, and those will not change.
  • It’s cheaper than whole of life coverage.

The Cons

  • The package only covers you for the term. If you outlive the plan, there will be no payout for you or the family.
  • The set payout could become less valuable over time due to the rate of inflation. This is especially true for longer terms.
  • Your family’s needs may change during the term. If you want the plan to reflect this, decreasing terms may be better.

When is it Best to Choose a Fixed Term Life Insurance?

Frankly, the stability offered by fixed-term insurance packages make them a good option for most applicants. However, people in some situations are particularly suited to this option. When you have an interest-only mortgage, for example, this is the perfect form of protection.

Likewise, it’s a good option for those that only have financial worries for the next few years. Parents may only need to cover their lives until the kids are grown up. This, combined with the ability to write the policy to bypass the 40% inheritance tax, makes it a great solution.


What Other Factors Should be Considered?

Deciding to go for a level fixed term life insurance plan is a great starting point, but it should be tailored to your needs too. There are several extra situations to consider. Perhaps most importantly, you should consider whether to get a single or joint plan. Both options have pros and cons, but a joint option often works out better if at least one of you outlives the policy.

Meanwhile, it can be beneficial to add coverage for terminal or critical illnesses. They might not prevent you from outliving the plan, but they will inevitably have a huge influence on your lives. Not least on a financial front.

Where is the Best Place to get Fixed Term Life Insurance?

Good question. By now, you should realise that no two candidates are identical, which is why you need a service that is tailored to your specific needs. Thankfully, we can point you in the direction with our support and unbiased reviews. This makes the process simpler while ensuring you get the best deal too.

Take the first step towards your level fixed term life insurance by clicking the button below.