Term Assurance

What would be the financial impact on your family if you were to pass away?

Would your partner have enough earnings to cover your outstanding financial obligations?

If not, life assurance could protect them from financial hardship.

Finding a low cost term assurance plan is like finding the best deal on any other insurance, utilise your resources and shop around.

Starting with the web you can gain a good understanding of the leading life insurers and their products. By asking a range of providers to quote you can ensure a competitive price and get exposure to the type of service you can expect.

Each insurer tends to conduct their own methods of underwriting a policy which means one insurance company may well look upon you more favourably than another and offer you favourable rates

Both the government and associations have produced guides and information on life insurance. The Financial Services Authority Site - Money Made Clear has a number of useful insurance resources.

Whilst DirectGov has a useful section for consumers when looking to buy insurance.

Like many other insurance products term assurance premiums are dependant on a number of personal factors and cover you choose. Personal factors which the insurers consider include your age, whether you smoke and any pre-existing conditions.

Although with age we get the benefits of cheaper car and home insurance we are not as fortunate with life insurance. It will come as no surprise to you that as we age so our likelihood of the worst happening increases.

Insurers build this fact into their quoting mechanism and thus the older you are the higher your premiums will be.

The cigarette packets themselves do a good job of summarising the health risks associated with smoking.

If you have used tobacco products in the past 12 months then most insurers will deem you a smoker and in turn quote you inflated premiums to account for the additional risk

Pre-existing conditions can affect the premiums quoted and the cover provided by the policy, failure to disclose a condition could result in your policy being void.

Level term assurance is often used as a basic life policy to protect family finances or to cover an interest only mortgage as the level of cover is fixed for the term of the policy.

Decreasing term insurance is often used to protect a principal repayment mortgage loan as the level of cover can decline in line with your outstanding mortgage.

Adding a critical illness policy to your term assurance financially protects you if you were to be diagnosed with a critical illness such as cancer or a heart attack.

A single life policy is designed to cover a single person. A joint life plan is designed to cover a mortgage or loan which is in joint names.

A joint life term assurance policy covers two lives but will pay out only once, on the first event.

Please note if there is a claim on a joint term assurance policy it will automatically terminate, the survivor is no longer covered by the policy.

Guaranteed premiums ensures your premiums are fixed, they will not increase at any time during the life od the policy.

A policy with reviewable premiums allows the insurer to review the risk of your policy every 2 to 5 years which in turn gives them the right to adjust your premiums according to the risk.

As you would expect, at the outset the premiums for a guaranteed term policy is higher than a reviewable plan however over time guaranteed premiums tend to work out cheaper as the insurer has no right to review your risk and inflate the premiums.

An additional option available with a life assurance policy which ensures your cover increases with inflation during the term of the policy.

For example £200,000 worth of term assurance cover today, will still be worth £200,000 in real terms at the end of your plan as the amount of cover will increase in line with the retail price index(RPI).

Waiver of premium ensures your monthly premiums are covered should you be unable to work an earn an income due to illness or injury.

In such times of needs this additional cover provides you with the peace of mind your premiums will be met and you remain covered.