A basic introduction to term life insurance, this article describes the two cheapest forms of term life insurance available in the market place and some suggestions on where these are best used.
Term life insurance is the cheapest most basic form of life assurance available. It does not include an element of investment. It's core feature is to only payout the sum assured if the death of the life assured occurs within the set period of time known as the term. If the policy is cancelled within the term then there is no cash value for the premiums already paid.
The absolute cheapest version of term life insurance is decreasing or reducing term life insurance. Premiums for this type of insurance are lower due to the fact that the sum assured reduces to zero over the term period. This makes this type of term life insurance beneficial to protect a capital and interest repayment mortgage, since the mortgage balance reduces month by month. Should the life assured die at any point within the term then the sum assured will be sufficient enough to repay any mortgage debt and thus removing the burden on the remaining spouse and or family.
AdvantagesLevel term life insurance offers a fixed sum assured throughout the term (the same amount for period of cover), the premium is obviously more expensive than decreasing / reducing term assurance, however the advantage is the benefit amount will remain constant. This type of policy is more suited to family protection (protecting your loved ones with a fixed cash amount on your death). But may also be suited to protect an interest-only mortgage or for business protection such as key man insurance, or shareholder protection.
AdvantagesWhat Life Insurance Do I Need For My Mortgage?
So you need some life insurance to protect your mortgage should the worst happen to you. I am sure you are aware a mortgage is the largest debt that the majority of us face in our lifetime. If that mortgage was obtained on the basis of a couples combined income then the loss of life from a spouse could bring upon some immense financial strain to the remaining partner. Not to mention that if the widow's income does not stack up they will be unable to remortgage or possibly maintain the existing mortgage payment.Using Conveyance Solicitors When Buying a Property
Conveyancing is a legal process of transferring ownership or title of a property from the seller to the buyer. A conveyancer looks after your legal interests when taking part in a property transaction. Conveyancing involves all the various searches, checks on the property, land registry and title deed, transfer of any money from the buyer/mortgage lender to the seller, plus any final post sale tasks.Importance of writing your life policy in trust
Most life insurance companies in the UK offer a free services for placing your life cover into trust. This article explains why you should seriously concider doing so, and why seeking independent advice can ensure you have secured the wellfare of your family.