We understand you may have lots of questions regarding your protection requirements. Please contact us if you would like to discuss your situation further with one of our consultants.
Term Life Insurance
This is a life cover policy that runs for a specified amount of time, or 'term', for example – 30 years. This type of insurance policy is often taken out to cover a loan, such as a mortgage, or to cover an ongoing financial commitment, such as raising children.
There are three different variations of term life insurance policy:
1. Decreasing term.
3. Increasing term.
Decreasing Term Life Insurance
Decreasing term insurance is intended to assist your loved ones in repaying your financial obligations, such as a repayment mortgage if you die within the policy's term. A diminishing term policy reduces the amount of cover each year for the duration of the policy, eventually ending at £0. This is frequently in conjunction with a debt that needs to be paid off, such as a mortgage. For the term, your monthly premium payment remains constant. The interest rate on your mortgage will affect your insurance, so be sure your protection adviser has taken this into account.
Level-term life insurance is a type of insurance policy that pays out a cash sum if you die during the term of your policy. The payout is the same whether you are near the beginning or conclusion of your policy, and the monthly premiums remain the same throughout the term unless you make any adjustments. Level-term insurance is frequently purchased to protect the lives of the policyholder's loved ones.
If you and your family survive the policy term, you will receive nothing.
Level-term policies do not account for inflation, so keep in mind that the cash pay-out amount may appear appropriate when you take out the policy, but this may not be the case 15-20 years later.
Increasing Term Insurance
An increasing term insurance policy raises the amount of coverage by a fixed amount each year for the duration of the policy. This sort of policy is frequently chosen to preserve the policy's value against inflation. An increasing term life policy also takes inflation into account, which means that the amount of a potential payout rises in tandem with the rate of inflation. Because this form of policy has the potential for the highest payment of any term policy, the monthly premiums are likely to be greater than those for declining and level term plans. Term insurance premiums may also rise regularly.
What is the Right Amount of Cover for Me?
This is determined by the individual's circumstances and personal priorities. The three most important factors to consider are:
1. What do you need to protect?
2. How much cover do you need?
3. How long do you need the cover for?
Our specialist protection advisers can spend the time talking you through the range of options and answering any questions you may have.