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Term Assurance

Term Assurance is a life insurance policy which covers the life of a person in monetary terms in return for a payment, usually monthly, and known as a premium. Term assurance is the cheapest and simplest form of life cover, providing life assurance for a fixed term only.

The sum assured is payable only if the life assured dies within that term.

There is no investment value to the policy at any time and at the end of the term there is no payment.

Policies can cover a single life or be on a joint life basis.

Level Term Assurance
Level term Assurance the sum assured does not change during the term of the policy. Policies can used to repay a loan on the death of the borrower (the life assured). Level Term Assurance is most suitable when the loan has a fixed capital value that remains unchanged throughout its term.

Family Income benefit
Level term can also be used to provide family protection for a set period to pay either a lump sum or regular income payments for the remaining term of the policy on the death of the life assured, i.e. until the children leave school.

Decreasing Term Assurance
Decreasing term assurance indicates that the sum assured decreases over the term of the policy. This is commonly used to protect a capital & interest repayment mortgage, where the outstanding balance reduces during the life of the borrowing. This type of policy can also be used to cover the Inheritance tax liability over a seven year period of a Potentially Exempt Transfer (PET).

Critical illness cover is a common additional benefit that can be added to a Life assurance policy. The sum assured is payable on the conclusive diagnosis of a critical illness, such as cancer, a heart attack, multiple sclerosis or a stroke.

The cost of providing life cover has fallen over the past few years. Policies are usually cheaper for a non-smoker. A non-smoker is generally defined as someone who has not smoked cigarettes in the last 12 months. If you would like a quote for a new term assurance or to see if the premiums on your existing policy are still competitive, please contact us.