This provides protection for a pre-specified term and is therefore particularly useful for covering a specific debt or period, e.g. a mortgage or until children have left home.

The options with Term Assurance are:

·        Level cover : under this plan the sum assured remains the same for the duration of the contract.

·        Increasing cover :  indexing your sum assured allows you to maintain the real value of your life assurance protection as it increases automatically each year, regardless of your state of health at that time.  Your contribution will increase each year to reflect the increased sum assured.  If the sum assured is increasing by 5% the premium will increase by more than 5% to cover not only the increase in benefit but also the fact that you are one year older.

·        Convertible cover : under this plan the sum assured remains the same for the duration of the contract.  An extra payment is made to allow the policy holder an option to convert the original policy (or part of it) to another type of policy - increasing term assurance, whole of life or endowment - without further medical evidence being required.

·        Reviewable cover :  under this plan the sum assured remains the same for the duration of the contract. Premiums are kept to a minimum as you, rather than the insurance company, are shouldering the risk of changes in mortality experience. The insurer has the right to review premiums based on claims history, which could mean premiums increase significantly at a review.

·        Renewable cover : under this plan the sum assured remains the same for the duration of the contract.  This type of policy usually has a relatively short term, such as five years.   For a higher premium you acquire the option of extending the original term of the policy, without having to provide further medical evidence, however, the standard rates at that time will apply and it is likely that the premium will increase.

·        Decreasing cover :  under this plan the sum assured is specified at the outset of the contract and decreases throughout its term.

·        Mortgage Protection : under this plan the sum assured is specified at the outset of the contract and cover decreases throughout the policy term.  The decrease in sum assured will be broadly in line with the reducing mortgage debt. Most providers will set an initial level of mortgage interest rate when calculating the rate at which cover will reduce over the term.  In many cases, if the actual mortgage rate rises above the initial assumed interest rate, it is likely there will be a shortfall in cover to repay the loan.

·        Family Income Benefit : under this plan, on the death of the life assured, the insurer will pay out a series of regular annual payments until the end of the original term. This is an extremely cheap form of life assurance. The initial sum assured is set to provide a specified annual payment until the end of term.  This sum assured reduces each year that passes without a claim being made.  Consequently, Family Income Benefit is a form of decreasing insurance.  It is usually possible for the annual benefit to be commuted by the beneficiaries, for a lump sum payment on death.  However, this will usually be lower than the total outstanding payments at that time.  

It is possible to obtain combinations of cover form some providers, for example, Increasing Renewable Convertible cover.

In addition, a trust enables the policyholder to exert some control over how the policy proceeds can be spent, especially if the beneficiaries are minors.

To speak to one of our fully qualified independent financial advisers now either phone 0871 433 3700 or click the contact section on the bottom of this page and someone will speak to you straight away to help you with your life assurance choices.