|
|
| Home > Life Assurance > Term Assurance |
 |
 |
This is a type of life assurance contract that provides a set amount of cover for a certain amount of time. Once the term of the policy stops, then the policy terminates and there is no payout. This is the cheapest type of life cover policy, as it may or may not be claimed upon. It is usually suited for people who need protection for a pre-determined amount of time. For example, a parent may only require life cover until his or her child reaches the age of 25. Another example, would be a person who took a level £200,000 mortgage over 25 years; they would only require £200,000 of life cover over 25 years and so term assurance may be suitable for them.
There is a specific type of term assurance that is designed for a repayment mortgage, where the outstanding loan reduces every year. It is called "deceasing term assurance" and is designed to reduce in line with the mortgage. It is usually guaranteed to repay the mortgage, as long as interest rates are not above a set average amount. |
|
|
|
|
|
|
