Term Life insures you for a certain term, e.g. 20 years. By choosing a 20-year term policy and you’re covered for 20 years . If you were to pass away during your term, the policy pays out. If you outlive your term, there’s no pay-out.
You are basically putting a bet between you and the insurer.If you die during the term of 20 years, you/spouse is paid out the sum assured you selected. If you don’t die the insurance company wins!
Take out conversion option with your policy so that you’ll have the opportunity to extend your cover at any time without having to submit any medical information. Without a conversion, any future health issues may prevent you getting cover when you’re older at an affordable price. Adding conversion to your plan costs very little extra.
Whole of Life
There are two types of Whole of Life:
- Reviewable. (Not recommended!!)
Reviewable Life cover is a policy that gives your insurer the opportunity to review your policy every 10 years until you are 60. At these reviews you will expect price increases and plenty of phone calls of giving out to Joe Duffy!
Guaranteed, on the other hand, covers your whole life, but without the worry of unexpected price increases. It’s more expensive than Term cover, but it’s also guaranteed for life so this could be option for some clients. This type of cover is also used as Inheritance Tax Cover.