Term assurance – comparing policies
Term assurance is a policy that covers you for a defined period of time. If you die within the period of the term assurance, a payment is made to your beneficiaries. If you are still alive at the end of the term, however, you don’t receive any payment – not even the return of the money you have paid into your policy – and if you stop paying during the term of the policy, there is no benefit or return of funds either. It’s therefore very important that you choose your term assurance policy carefully.
Can we save you money on your life insurance or critical illness?
|
|
 |
 |
How do I choose term assurance?
Many people take out term assurance – also often known as life assurance – in order to cover their mortgage payments, should they die before their mortgage is repaid. Indeed, most mortgage lenders insist on some level of coverage being taken out as a condition of the mortgage, so that the lender can be sure that they will get their money back if the homeowner dies before the end of the mortgage term. There are several types of term assurance available, some of which may suit you better than others:
- Decreasing term assurance – many people take this option when term assurance is specifically to cover their mortgage or other investments. The amount insured decreases during the life of the policy, and your premium will decrease with it. For example, you could take out a term assurance on a mortgage of £100,000 initially, but as your mortgage shrinks as you pay it off, so does the term assurance, so that after 10 years, your mortgage is £50,000 and so is your term assurance.
- Index linked term assurance – because £100 won’t be worth the same in ten years’ time as it is today, you can choose to take out an index-linked or Increasing term assurance policy which means the value of your policy will increase in line with inflation or the Retail Price Index. You may pay higher premiums for this type of policy.
- Level term assurance – this policy guarantees that a certain sum will be payable if you die during the term of the policy.
- Renewable term assurance – you can choose to renew or extend your term assurance when your current policy comes to an end. You may also choose to convert your term assurance policy to a whole life insurance policy or similar product.
Jump Money is a specialist in life insurance and is happy to answer any questions you may have related to life insurance, life assurance, term assurance and life cover. The company will strive to fit an insurance package to the exact criteria you need in order to help you avoid buying products you do not need as well as helping you fully understand your purchase. To find out more about how Jump Money can help you protect yourself and your belongings call now on 0845 8516262 or fill in an online quote form today.
.
Return to Jump Life Insurance articles index
Get a free online Life Insurance quote | Get a free online Critical Illness quote | Get a free online Mortgage Protection quote | Get a free online Income Protection quote | Return to the home page