Term Life Insurance

What is term life insurance?

Term life insurance is a policy that is taken out for a set amount of time; it has a start and an end date.

The policy is flexible in that you can choose the length of term you want the cover to last for and the size of the lump sum that you want to protect your loved ones should you pass away within that term.

It is important to remember that once the term ends, you are no longer covered. If you die after the policy’s end date, your family will not receive a payout – unless you have other life insurance cover in place.

There are different types of term life insurance, which we will go into more detail later.

Why choose term life insurance?

People tend to choose term life insurance to cover the length of their repayment mortgage or existing loans. Some may even choose for the policy to last until their child reaches a certain age, such as 21, for example.

If you pass away within the pre-agreed term, your loved ones will receive a lump sum to cover all expenses and everything is guaranteed to be paid off (if the lump sum is sufficient). This way, your loved ones can focus on remembering you and grieving, rather than worrying about how to pay off your expenses.

Don’t forget that while you may not expect to die within this term, anything can happen at any time, which is why getting cover in place to financially help your loved ones is highly important.

How much is term life cover?

The chances of you passing away during the term are generally quite low, meaning that the risk for life insurance providers is also relatively small. For this reason mainly, term life policies tend to have lower premiums than others such as whole of life insurance.

The cost of term cover really depends on the policy-holder. Factors such as age, health, amount of cover, etc. are all taken into account to determine the exact cost of your life insurance premiums.

If you would like to protect your family financially by putting a plan in place to cover your mortgage or other expenses, then you should look to take out a term life insurance policy. At Unite Life, we’re available to help provide more information on cost and find the best policy to suit you and your needs.

Simply give us a call today, obligation-free, and we’ll be able to help! It’s better to get life insurance in place as soon as possible – generally, the younger you are, the cheaper your life insurance policy will be.

Types of term life insurance cover

Term life insurance is one of the simplest and most popular life cover policies. There are different types available so many factors need to be considered to determine which policy is best for you.

The two main types of term insurance are level term and decreasing term cover.

Level term insurance

This is also known as level term assurance and is abbreviated to LTA for those in the life insurance industry. If you come across these terms, they all mean the same.

With LTA, you are able to set the term of the policy and the amount of cover you want. For example, you may want to the policy to last 25 years (the typical duration of a mortgage) and pay your loved ones a lump sum of £100,000. This means that if you die during this 25-year insured period, your policy will pay out the £100,000 to your loved ones so that they can pay it off.

The payout and premiums are fixed throughout the term and do not change.

It is important that you’re happy with the term duration and cover amount from the beginning when taking out your policy - always double-check exactly what you are covered for to be on the safe side.

Decreasing term insurance

Similar to LTA, this policy is also referred to as decreasing term assurance and shortened to DTA. It is mainly used for the purpose of covering a repayment mortgage.

Decreasing term insurance is similar to level term insurance in that there is a pre-agreed, specific time frame during which the policy lasts, and there is a payout to your loved ones if you die within that period.

The main difference is the amount of cover – with DTA, it decreases over time. As you continue to pay off your mortgage, there is less left to cover as the years go on. For this reason, this is a cheaper type of term life insurance plan - it is seen as less of a risk for many insurers, resulting in cheaper premiums for you.

The future will forever remain unpredictable, but with this type of cover, you can rest assured that if you pass away within the set term, your loved ones will be able to pay off the mortgage without any worry.

Like all other policies, term life insurance will only pay out to your loved ones if you have kept up-to-date with paying your premiums and if you were entirely truthful when you applied for the cover.

Getting the best term life insurance policy

With a vast range of insurance policies available, our advisors at Unite Life appreciate and understand that it is difficult to differentiate between them all.

We are partnered with some of the best insurance providers in the UK, so we can evaluate not only the cheapest option, but the best one to suit you and your needs.

Our experienced team of friendly specialists can provide you with the facts and information on each type of life insurance policy, including costs, and help to determine which policy is best for you. Don’t hesitate to get in touch with us today – obligation-free!