Term life insurance cover
What is term life insurance cover?
Term life insurance cover is one of the two most popular forms of life insurance cover and is commonly offered alongside a mortgage. Term life insurance cover provides a customer with peace of mind that should they die during the term of their life insurance policy that their family will receive a lump sum payout which they will be able to use to pay off their mortgage and to continue to live in a similar level of comfort to before.
Term life insurance cover provides customers with a life insurance policy over a certain term, and is usually offered for the same length of time as a mortgage. Term life insurance cover is rarely offered beyond a customer’s 60th or 70th birthday, so the majority of customers live beyond the end of their term. This makes term life insurance cover much cheaper than whole life insurance cover, which provides customers with life insurance for their whole lives.
How does term life insurance cover work?
When a customer reaches a point of financial responsibility in life, for example they buy a home, or have a child; they will be encouraged to think about what might happen if they were to die tomorrow. Most customers will look at a term life insurance cover policy because it will provide their family with a payout which they can use to pay off their mortgage, or to pay for a child’s upbringing when you are no longer there to provide for them.
A customer will take out a policy for a set period of time, usually the length of their mortgage, and will be given a price for that policy based on their age, health, and likelihood to die during the term of the policy. If the customer was to lose their life during the term of the policy then their family would receive a lump sum payment from the insurance company.
If the customer lives beyond the end of the policy they will receive nothing, but will have paid for a policy that would have protected their families financially should the worst have happened.
Why do I need a term life insurance cover policy?
There are many reasons to take out a term life insurance cover but the biggest reason is to make sure your mortgage is paid off, guaranteeing your family somewhere to live even after you are gone.