Term Assurance

Term assurance is the most straightforward and the cheapest form of life insurance. It offers cover for a specified amount of years.

This form of cover tends to be much cheaper than whole-life policies because you are only being given cover for a number of years. If you live to the end of the term, you will receive nothing.

Premiums on identical term assurance policies can vary enormously, so shop around or consult an independent financial adviser.

The lowest premiums are charged on decreasing term assurance, where the amount of cover reduces as the term progresses. However, you have to be confident that the amount of cover in the final years will be adequate for your needs.

If your circumstances change and you need cover for longer, you may be able to extend the policy. Some policies can be converted into whole-life or endowment policies.

Last Updated: May 2008 © Moneyextra.com

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