Level Term

Level term assurance pays out if you die or, as in the case with some policies, you are diagnosed as having a terminal illness during the term of the policy. If you live to the end of the term, the policy expires and no payment is made. Similarly, if you stop paying the premiums at any time cover will cease. However some policies may offer a waiver of premium option that allows the policy to remain in force under certain circumstances: disability etc. If you live to the end of the term, the policy expires and no payment is made. Similarly, if you stop paying the premiums at any time cover will cease. With term assurance however, cover is guaranteed for a limited period of time – typically 10, 15 or 25 years. The cheapest and most straightforward option is level term insurance which guarantees to pay out a fixed amount of money upon death for a fixed-rate premium. By paying extra, it is usually possible to include a waiver of premium which covers monthly payments if the policyholder is unable to work due to ill health. If you wanted to change the type of policy, it is relatively simple, but watch out as premiums may go up because of increased age or new medical conditions. Alternatively, premiums and cover can be set to increase each year to provide protection against inflation. Renewable term assurance is another option that gives the policyholder guaranteed insurability, irrespective of their health at the end of the term. One of the most important things to do is to write the policy into trust, so its value does not form part of the holder’s estate. The amount payable would not form part of an Inheritance Tax calculation and it will also allow money to be paid direct to beneficiaries. Most insurers include the option to write the policy in trust at no extra charge. Joint life policies for couples may not be a good idea; the surviving partner could be left uninsured when the first partner dies, and because premiums increase with age, they are likely to pay much more when looking for new cover and your personal situation will need to be considered.  Whole of Life Decreasing Term Assurance Convertible Term Assurance Family Income Benefit
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