Term Life Insurance

Term life insurance is perhaps the simplest form of life insurance. It was developed to provide temporary life insurance protection on a limited budget. Since term insurance can be purchased in large amounts for a relatively small initial premium, it is well suited for short-range goals such as life insurance coverage to pay off a loan, or providing extra life insurance protection during the child-raising years..

A well-designed term life plan can do the following:

Mortgage life insurance is designed to pay out a lump sum upon the death of a person named on the policy. There are many reasons why life insurance is required, the most common being to provide for a loved one, or to ensure the repayment of a long term debt such as a mortgage. Besides offering Life Cover it is also possible to include Critical Illness cover and a number of other benefits on your policy if you so wish. It makes sense to ensure that you have sufficient life cover to repay your mortgage if you die. This is particularly important if you own the property with a partner or have a family. Even if you are single, in some circumstances, it would still be a prudent decision to take out insurance. You never know when your circumstances may change and you may find you are uninsurable when you come to apply in the future.

• You can insure yourself to cover a debt such as a mortgage for the exact term of the mortgage
• Depending on your circumstances you can either purchase level term insurance, or decreasing term insurance. This means you can make sure you keep premiums to a minimum
• You can include other benefits at the time of application, such as critical illness benefit. This means that you have all of your cover in one policy, again helping keep cost to a minimum
• People will normally select the term of their policy to coincide with major events in their lives. If you are looking for cover to protect your family, then setting the term until the children are 18 or 21, is a logical decision. Equally many older couples will select a term to expire at retirement age. This way they have the peace of mind of knowing that they have provided for their partner. If you are protecting a mortgage, loan or other liability, then the term is normally set to the date the loan would normally have been repaid.

The typical term to repay a mortgage is 25 years. During this time, most people will see many changes to their life and lifestyle - they could meet a new partner, get married, have children, buy one or more new homes. Unfortunately during a 25 year period, statistics also tell us that at least 20% of all deaths will occur in men aged between 25 – 65. Female deaths in the same age range is over 12%.

Even if you are a single person when you buy your first property, it makes sense to protect your mortgage from the outset. As we have pointed out, there could come a time in your life where the insurance providers consider you uninsurable due to poor health or accident. Imagine how you would feel if you had a young family and found you could not insure yourself, even though you could have when you first bought the property. Obviously cost is important, and so you will probably only want to insure yourself for the amount you will owe to your mortgage lender during the period of the loan.

Also the type of mortgage could have an impact on the premium.

An interest only mortgage is one where only interest is paid during the term of the mortgage, and so the mortgage debt doesn't reduce. The amount originally borrowed has to be repaid in full on the day you redeem the mortgage. To protect this type of mortgage, you need a policy that will pay out the full amount of your mortgage at any point during the mortgage term - whether you die in the first year of your mortgage term, or the last year. This is known as a level term policy. If you have a repayment capital and interest mortgage, then slowly over the term of the mortgage you reduce the amount you owe to the mortgage lender. It is possible to buy a policy where the amount paid out reduces approximately in line with the reducing mortgage debt (assuming mortgage interest rates stay within a certain range). This is known as a decreasing term policy and because the amount to be paid out reduces, they are normally cheaper than level term policies.

All Your Needs Insurance will listen to your concerns, assess your needs, explain options, and help you get the right coverage for your financial insurance needs.

Keep in mind that the insurance marketplace is dynamic. Because circumstances, coverage's available, and regulations change from time to time, we suggest that you ask our All Your Needs Insurance financial insurance staff to evaluate your coverage periodically — a service that demonstrates our commitment to provide valuable insurance guidance. Remember, just having insurance doesn't mean that you have adequate or proper coverage. We will answer your questions and help you make the best decisions.