Term Assurance

The word Assurance usually implies that the Insurance cover is being taken out to cover an eventuality, rather than in case of something unexpected happening. Term Assurance is different however, as the Assurance of a payout upon the policyholder's death is only guaranteed within a certain period of time. Therefore, Term Assurance is more commonly known as Life Insurance. The cost of a Term Assurance policy will depend on a number of factors, including your age, your gender, your lifestyle and the state of your health. This is because the insurance company needs to establish the risk of you dying before the term of the policy is over, and therefore the likelihood of a payout.

When you are planning to take out a Term Assurance policy, you will be asked by the insurer to specify the length of time during which you would like to be covered (the 'term'), say 10, 20 or 30 years. Unlike other types of Life Insurance, a Term Assurance policy does not build up any value, despite your regular premium payments. This means that although you would receive a payout in the event of your death if it happens within the time limits of the policy, you would receive nothing if you died after this time. If you would like to talk to an experienced insurance adviser about whether Term Assurance is the right way to protect your dependents from financial hardship in the event of your death, please complete the short form on the next page.

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Important Tips for Buying Life Insurance

• Life 'Insurance' is different from Life 'Assurance' because it is not a certainty.  You would insure yourself against something unexpected happening, but would take out Assurance to minimise your financial exposure to something inevitable.

• If you take out any type of 'Term' insurance product, this means that you are choosing a set period of time when your cover will be active.  Beyond this period, your cover is no longer valid.

• The policy will be cheaper the less 'risky' you are to an insurer.  If you smoke, are in poor health or enjoy high-risk sports, statistically you are more likely to die, and therefore the cost of your premium will be higher.

• Joint policies for couples should be approached with a certain amount of caution.  The average joint policy pays out only after the first person dies, but for a relatively small amount more you could get separate policies with two payouts, which would have a greater benefit for your family (especially when you consider the expense of inheritance tax).