What is Term Life Insurance?
Term Life Insurance is a type of life insurance that has a policy end date. For instance, the maximum term date is up to the age of 90. So, if you live beyond the age of 90, the life insurance policy would have expired and won’t pay out. However, most policies pay-out between the ages of 80 and 90. Additionally, less than 1% of the UK population were older than 90 in 2019. Therefore, there’s a high probability that the policy will pay-out. Nonetheless, it’s an important thing to consider.
If you’d like a policy that doesn’t have an expiration date, a whole of life policy may be better suited to you. With this type of policy, unless you live forever, it’s guaranteed to pay out.
Regardless of whether you have family protection, income protection, or mortgage protection, you’ll have either a term or whole of life policy.
The advantage of term life insurance policies is that it offers financial security to your family for an affordable rate.
How Does Term Life Insurance Work?
When someone takes out a term life insurance policy, the insurer will determine premiums based upon the pay-out amount, the health, age and gender of the policyholder.
In some cases, you may be referred to a doctor before acceptance. However, this is rare.
After taking out the policy, you pay a monthly premium to the insurer. Depending on your cover, health, and age, it could be anywhere from £10 a month to £100.
If you were to die during the policy, the insurer will pay-out the full amount to your dependents.
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