Is Term Based Life Insurance Right for You?
If you have dependents who would struggle financially if you were to die, life insurance is a must. Choosing between term insurance and other forms of life insurance, such as whole life insurance, is a matter of personal circumstance. You should consider it if you are only looking to protect your family for a specified period of time.
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What is term life insurance?
Term based life insurance is an insurance policy that gives your family or designated beneficiary a sum of money in the event that you should pass away prematurely. The policy is tied to a term and only pays a benefit within that time period. It is a great way to protect your dependents until they are ready to support themselves.
How much does term based life insurance cost?
This type of insurance is very affordable. Premiums will vary greatly by plan and provider and depend on both what you’re looking for and your own age, lifestyle, and health. However, many providers offer plans that start as low as £4 or £5 per month.
How much coverage does term life insurance offer?
This will also vary greatly by plan and provider. This policy coverage can be as low as £10,000 or as high as £5 million or more. It’s important to assess your family’s financial needs to determine what kind of coverage you’d like. The more coverage you have, the higher your premium will be.
What happens when my term life insurance policy ends?
When your term policy ends, you are no longer covered and your family will not receive any benefit if you die.
Can I extend my term after coverage ends?
Yes. Some providers will offer the option of a renewable term policy, which allows you to renew your policy without undergoing another medical evaluation, although your premium is subject to change. Other providers will require that you apply for an entirely new policy in order to continue your coverage.
Does my term life insurance policy have a cash-in value?
No, term based life insurance policies have no cash-in value.
What’s the difference between term insurance and whole life insurance?
This type of insurance has no cash-in value, and after the designated term is over, the policy ends. Your family can no longer withdraw a benefit from the policy once the policy ends. It’s designed to pay out if you die prematurely.
Whole life insurance provides lifelong coverage. It is valid until you die, and never expires as long as you continue paying your premiums.
How long are term life insurance terms?
These vary according to your provider and your coverage needs, but they can be anywhere from one year to 30 years. Some providers offer terms up to 40 years.
How do I choose a term based life insurance term length?
You’ll want to choose a term length that is based on how long you think your family would need coverage. Most people base their term length on when their children will age and become financially independent or when their mortgage will end.
Is there an age limit on term life insurance?
Yes. The exact age limit will depend on the provider, but almost all have a maximum age. Usually, there is an age limit to apply for coverage as well as an age limit after which you can no longer be covered. For example, a provider may require that you be under 64 to apply, but you can receive coverage until you’re 74.
There are Other Types of Term Insurance
Other term based insurance types might be suitable for a number of people
- Decreasing term
- Level term
- Short term
- Fixed term
- And many others that can be found in our reviews
How can I get covered now?
This one's easy! Click the button below to get yourself a free term life insurance quote.
Frequently Asked Questions
What is life insurance?
Life insurance is a type of insurance policy that pays out a lump sum of money to your family & dependents in the event of your death.
Life insurance is one of the most generous things you'll ever purchase. By purchasing a life plan, you can make sure that the people you love the most are well looked after should the worst happen.
Which type of life insurance cover is right for me?
There are three main types of life insurance cover - these are:
Level term insurance policies pay out if you die within a fixed timeframe which you choose up front. Premiums and pay-out stay the same, regardless of whether you die on the first day, or the last day of the policy.
Learn more about level term life insurance >
The whole of life policies guarantees to pay out regardless of when you die – with no fixed time limit. These are normally more expensive, but you can get lower monthly costs by taking out an Over-50s policy.
Learn more about whole life insurance >
Decreasing term insurance policies are usually aimed at covering the remaining debt on a repayment mortgage if you die. These policies usually have a set timeframe and the pay-out decreases over the policy term – usually in line with the remaining mortgage debt. There are other tailored life insurance plans (such as Critical Illness Cover, Income Protection and Mortgage Protection).
How much does life insurance cost?
This really depends on your own specific circumstances, but the average UK monthly life insurance cost is roughly £8.50 (but can be as little as £5 per month). The factors that have an impact on your life insurance costs include:
Age: Usually, life insurance rates increase as you age. If you are already over 50.
Health: Do you smoke? Any chronic conditions? These could have an effect on the cost of your life insurance.
Read more about critical illness insurance here >
Gender: Statistically, women live longer - and pay lower life insurance because of it.
Occupation: Some jobs require more health risks - if you're a sky diving instructor, you will most likely be paying more on life insurance than the typical office worker.
Examination: A thorough medical checkup will let the insurer know if you're low risk - meaning your monthly payments will be lower.
Get a quote now >How much will I leave behind, if anything were to happen?
Again, this is largely dependent on the type of life insurance policy you decide to take out. The average life insurance payout is roughly £51,000, but with certain providers, this average raises to over £115,000.
However, these averages are basic indications on how much your dependents would receive in the case of your death. Unfortunately, there is no sure-fire way to know how much would be paid out, and your best bet is to get a free quote and see for yourself.