Term Life Insurance

If you’re seeking a straightforward way to protect your loved ones, term life insurance may be the solution. With clear terms and fixed coverage periods, this type of policy can offer peace of mind, ensuring your family is financially secure if the unexpected happens. At Ascot Mortgages, we make it easy to understand your options and find the right level of cover for your family, comparing leading insurers to secure a policy that fits your needs and budget.

What Is Term Life Insurance?

Term life insurance is a policy that covers you for a fixed period. If you die within that timeframe, the policy pays out a lump sum to your beneficiaries. It is designed to provide clear, predictable protection at an affordable price, making it ideal for covering major financial responsibilities such as a mortgage, childcare costs, school fees, or household bills.

How Does Term Life Insurance Work?

A term life insurance policy is straightforward:

• You choose the cover amount and how long you want the policy to last.
• You pay monthly premiums for the duration of the term.
• If you pass away during that time, the insurer pays out a tax-free lump sum to your chosen beneficiaries.

If the policy expires while you’re still alive, the cover simply ends. This is why term life cover is usually cheaper than whole of life insurance.

What Are the Types of Term Life Insurance?

Understanding the different types of term life insurance can help you choose the right one for your circumstances: 

Decreasing Term Life Cover

With decreasing term life cover, the payout amount reduces over time. This type of cover is often used to protect a repayment mortgage, where the amount you owe decreases over the years. This type of policy is typically the most affordable because the risk to the insurer reduces over the term. It’s a cost-effective way to safeguard your family home and ensure the mortgage can be cleared if you pass away.

Level Term Life Cover

Level term life cover is a straightforward option where both the payout and premiums remain the same for the duration of the policy. This means that no matter when you pass away during the term, your beneficiaries will receive a fixed lump sum, and you won’t face any unexpected premium increases. This type of cover is particularly useful for long-term financial commitments that don’t decrease over time, such as an interest-only mortgage, school fees, or income protection.

Increasing Term Life Cover

With increasing term life cover, the payout amount rises annually, typically in line with inflation. This type of policy ensures the value of your cover keeps up with the cost of living, providing extra protection for your family over the years. While premiums for increasing term life cover will rise as well, the added protection can be invaluable for people who want to ensure their loved ones are fully covered in the future. 

Family Income Benefit

Family Income Benefit is a unique type of life insurance that pays out a regular, tax-free income to your beneficiaries rather than a lump sum. This monthly or annual payment continues for the remainder of the policy term, helping your family cover ongoing living expenses, just as if you were still providing your regular income.

Which Type of Term Life Cover Should I Get?

The best term life insurance for you depends on your personal circumstances. For example:

• A repayment mortgage – decreasing term is often a good match.
• An interest-only mortgage or long-term commitments – level term provides fixed protection.
• Concern about inflation – increasing term ensures cover keeps pace with rising costs.
• Families who rely on your income – Family Income Benefit can provide ongoing financial support.

At Ascot Mortgages, we will assess your needs and help you choose the policy that gives you and your family the strongest protection.

What Do I Need To Get A Quote?

When you’re ready to get a quote for level term life insurance, there are a few key pieces of information you’ll need to provide to ensure an accurate and personalised offer:

• Personal information, e.g. your name, age, date of birth
• Lifestyle habits, such as whether you smoke
• General health details and medical history
• How much cover you’d like
• Preferred policy term length
• The type of policy you want.

By having this information ready, you can receive a more accurate quote, allowing you to make an informed decision about your level term life policy coverage.

How Much is Term Life Insurance?

The cost depends on how much cover you need and how long you want it to last. When obtaining a term life insurance quote, insurers will consider several factors:

• Age: Older applicants generally pay higher premiums.
• Health: Pre-existing conditions and lifestyle choices, like smoking, can increase costs.
• Cover amount: The higher the payout you want, the more expensive the policy.
• Term length: Longer terms often mean higher premiums.
• Occupation and lifestyle: Jobs or hobbies with higher risks may also impact your quote.

Getting a personalised quote is essential to understand the exact cost of your chosen term life insurance policy. As independent advisers, we compare trusted UK insurers to find a term life insurance policy that offers the right balance of protection and affordability.

What Are The Advantages of Level Term Life Insurance?

Level term life insurance offers:

• The payout remains fixed throughout the policy term, ensuring your beneficiaries receive the same amount no matter when you pass away.
• Premiums stay the same for the duration of the policy, offering predictable costs and making it easier to budget for long-term protection.
• The policy provides strong financial protection, helping to cover significant expenses such as mortgages, childcare, or education costs.
• It is simple to understand, with a clear structure and no complex terms or changes to the payout.
• It’s widely available from numerous insurers.

What Are the Drawbacks of Level Term Life Insurance?

While level term life insurance has many benefits, there are a few potential drawbacks to consider:

• If you outlive the policy term, you won’t receive any payout.
• Premiums may be higher compared to decreasing term cover, especially if you require a significant amount of cover.
• Inflation can erode the value of your payout over time unless you opt for an increasing policy.

Evaluating these drawbacks will help you decide if level term assurance is the best option for your financial needs.

Alternatives to Term Life Insurance

If level term life insurance isn’t quite right for you, there are alternatives to consider:

• Whole of Life Insurance: This provides cover for your entire life and pays out whenever you pass away. It’s more expensive but guarantees a payout.
• Over 50s Life Insurance: This type of life insurance guarantees a payout without need for a medical exam, helping to cover costs after you pass away.
• Critical Illness Cover: Often added to life insurance, this policy pays out if you’re diagnosed with a serious illness.

Exploring these options will ensure you choose a policy that best suits your financial situation and goals.

Should I Get Level Term Life Insurance?

A level term life insurance policy might be the right choice if:

• You have an interest-only mortgage.
• You want to ensure your loved ones can cover everyday living costs.
• You have long-term financial responsibilities, like school fees or family support.

However, deciding on this type of term insurance depends on your personal situation, financial goals, and the needs of those who rely on you.

Compare Term Life Insurance Today

Term life insurance is a practical and affordable way to provide financial protection for your loved ones. By choosing the right type, whether it’s level term or decreasing term cover, you can ensure your family won’t struggle financially in your absence. Contact Ascot Mortgages today for a term life insurance quote and to explore your options and find the perfect policy to safeguard your family’s future.