Affordable term life insurance
Basically, life insurance policy can be classified into two important categories:
1. Term Life Insurance 2. Whole Life Insurance
Both of these policies are specially meant to provide coverage to individuals. In this section, we will concentrate on studying Term Life Insurance Policy in the UK in detail.
Term Life Insurance policy in the UK is a type of life insurance policy, which provides protection to an individual against death for a specific period of time, or the tenure of the policy. It is also referred to as a pure protection policy.
In other words, it insures a benefit upon the insureds death, provided that the death occurs within the tenure of the policy. Thus, it has a set duration limit on the coverage period. Therefore, it is also regarded as Temporary Insurance.
Once the policy expires, it depends upon the sole discretion of the policyholder to either renew it or terminate it.
It should be noted that the policy does not provide any returns beyond the amount stated when the policy was taken, and that it does not build any cash value.
However, it offers full guarantee of the premiums. That means if one dies while ones policy is in effect and all of the required premiums have been paid up to that point, one s recipients would receive exactly the benefit amount that has been opted for while taking the policy.
Features of the UK Term Life Insurance Policy
Let us have a look at some of the salient features of this policy:
UK Policy Mechanism
There is no need to get worried about how this kind of policy actually works ! A few steps listed below will probably reduce your anxiety to some extent :
Theory of Decreasing Responsibility
The term life insurance policy is purely based on the theory of decreasing responsibility. This insurance policy provides protection to all the temporary financial responsibilities of the insured, and thereby, reduces the burden from his shoulders. Thus, in a way it washes away the entire burden of the insured and is, therefore, called a temporary insurance.Conversion Privileges
Term life insurance policies propose a conversion privilege for a definite period of years. This permit the insured to convert his term policy into a permanent insurance policy regardless of health state at the time of conversion. In this way an insured can obtain the required coverage for his family, and would also enjoy the tax advantages of a permanent insurance policy as cash flows rise.
Annual Renewable Term
In this form of policy, the premium is paid for one year of coverage, but the policy guarantees to continue each year for an agreed time period. This period may vary from 10 to 20 years, or rarely until age 95. In an Annual Renewable Term policy, the premium is slightly higher than the normal coverage, but the insured is more likely to have the benefit paid. Thus higher rates of premium are worth it.Who can Benefit from this Policy
Usually families, which are burdened with large financial obligations, can benefit to some extent by taking this policy. Since term life policies offer quite low premiums, this would probably enable young families to buy adequate coverage to guard against loss of revenue.Online Shopping in the UK
If someone were looking for a Term life insurance policy for more details on the Internet, the web would display a variety of life insurance sites.
There are four common types of life insurance websites:
Advantages of this policy
Though this insurance policy provides certain benefits, it also suffers from a few drawbacks:
Term life insurance policy in the UK is a need-driven insurance policy, as it accustoms to the temporary needs of an individual, which keeps changing from time to time. Thus, even if this policy suffers from certain limitations, it also provides wide protection to the ever-changing needs of individuals. Nonetheless it is always advisable to carefully evaluate any policy, be it term life, whole life, group life, and so on, before applying for it.
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