There are a couple of options for you to consider when choosing life insurance. Term insurance is the first type to look through. Most insurers offer term insurance as well as other financial providers.
Term insurance is based on a simple model of life insurance were the insurers will pay out policy benefits of you die within a certain time. If you were to survive beyond the end of the policy then there will be no payout (but hey time is better than the alternative!).
This type of life insurance is the least expensive type and will be based on your age, if you are a smoker and sex among other smaller details. Amount payable will also generally be higher the older you are in life. You can also choose a policy for both you and your partner if you so wish. Premiums tend to be higher for men too as on average their life expectancy is lower than women.
The ‘term’ policy types
The first is a level term life insurance policy which will simply pay the benefit on death and as the name suggests will stay the same throughout the term of the policy. Once the policy ends it has no value.
Convertible term insurance gives the option to be transferred into permanent cover when this original policy expires. The big draw of going for this type of policy is that the insurer cannot refuse you the right to take out a new policy on any grounds including poor health.
However, there are some conditions you should be aware of when taking out this type of life insurance policy. Firstly you must convert before the original policy expires; secondly the amount of the policy is limited to the amount the original policy was worth. Finally while you can’t be refused on the grounds of your state of health the premium offers will be dependant on your sex and age therefore it is sure to rise.
There is also decreasing term policies which are the cheapest
life insurance cover as the benefits paid out will decrease every year until the end of the policy where it will become worthless. This type of insurance is of particular interest to those on a repayment mortgage as with repayments to the mortgage the outstanding debt is also reducing each year.
