Latest News

Term Life Insurance

21st August 2020

Helping you repay a debt, like a mortgage and credit cards, or provide a legacy for your friends and family

Term insurance gives you life cover over a pre-agreed period of time. If you die during this period, your policy pays out a lump sum. This type of cover is useful for providing financial security for your dependents.

With term life insurance, you choose the amount you want to be insured for and the period for which you want cover. This is the most basic type of life insurance. If you die within the term, the policy pays out to your beneficiaries. If you don’t die during the term, the policy doesn’t pay out, and the premiums you’ve paid are not returned to you.

 

Factors affecting your term insurance premiums

  • your age
  • your health
  • how long you want the cover for
  • the level of cover you need
  • whether you smoke

There are two main types of term life insurance to consider – ‘level-term’ and ‘decreasing-term’ life insurance.

 

Level-term life insurance policies

A level-term policy pays out a lump sum if you die within the specified term. The amount you’re covered for remains level throughout the term – hence the name. The monthly or annual premiums you pay usually stay the same, too. Level-term policies can be a good option for family protection where you want to leave a lump sum that your family can invest to live on after you’ve gone.

It can also be a good option if you need a specified amount of cover for a certain length of time, for example, to cover an interest-only mortgage that’s not covered by an endowment policy.

 

Decreasing-term life insurance policies

With a decreasing-term policy, the amount you’re covered for decreases over the term of the policy. These policies are often used to cover a debt that reduces over time, such as a repayment mortgage.

Premiums are usually cheaper than for level-term cover, as the amount insured reduces as time goes on. Decreasing-term assurance policies can also be used for Inheritance Tax planning purposes.

 

Family income benefit policies

Family income benefit life assurance is a type of decreasing-term policy. Instead of a lump sum, though, it pays out a regular income to your beneficiaries until the policy’s expiry date if you die.
You can arrange for the same amount as your take-home income to be paid out to your family if you die.

 

Increasing-term insurance

The premiums and cover will increase during the term of the policy. This can be used to keep in line with inflation or to cover an increasing debt.

 

Renewable-term insurance

This has the option to exchange the original term assurance for another term assurance at the end of the term. The main benefit here is guaranteed insurability

 

If you’d like to find out more about term life insurance, please get in touch today – one of our insurance advisors will be able to advice you.

Return to news page
Gold star Gold star Gold star Gold star Gold star
"Our mortgage adviser Andrew Francis is brilliant. When we first met him we were first time buyers with very limited knowledge about the process of buying a first home in the UK. However, Andrew guided us through the process with his vast knowledge and professionalism. We had to recently re- mortgage our flat, Andrew got in touch with us well in advance he presented us with the best options for us and made the whole procedure painless. Of course, we were a lot more relaxed this time around, as we already knew that we are in good hands. Thank you for your help, Andrew!"

Vyara Panayotova , Feb 2020

Independent review from Google
Gold star Gold star Gold star Gold star Gold star
"Always been impressed We've used IMC for over 10 years and have always been impressed with the service. They have helped to guide us through various financial issues we've had and we've been able to make better choices as a result. I wouldn't hesitate to use them again"

SusB , May 2020

Independent review from Yell