Should you buy cheap term life insurance? It's an often-asked
question to which there is a cheap and simple answer. If you
have a mortgage or you have a partner, family or dependants that
could suffer financial hardship as a result of your death then
cheap term life insurance is a must!
Cheap term life insurance, otherwise known simply as life
insurance or term life is a cheap life insurance policy that
pays out a lump sum upon your death. The premiums are very cheap
and term life insurance policies are very easy to obtain. There
are two basic types of term life insurance available from
insurers - cheap decreasing term life insurance and cheap level
term life insurance.
Cheap decreasing term life insurance
Cheap decreasing term life insurance is very cheap. For only a
few pounds each month a cheap decreasing term life insurance
policy will pay the balance of your mortgage should you die
before it reaches full term. This type of term policy is called
decreasing term life insurance because the sum insured decreases
in line with your outstanding mortgage balance. The cheap
premium remains the same for the life of the policy, making it
an exceptionally cheap way to secure life insurance. A cheap
decreasing term life insurance policy ONLY pays out a lump sum
to clear your mortgage. This type of cheap term life insurance
does not make any other provision for the loved ones you leave
behind.
Cheap level term life insurance
Level term life insurance policies are not as cheap as
decreasing term life insurance, although these types of term
policies overall are still cheap, having only slightly higher
premiums attached to them. The reason for the premium not being
as cheap is that level term policies pay off your mortgage AND
leave a lump sum to your partner, family and/or dependants. The
sum insured through a cheap level term life insurance policy
remains the same through the life of the policy, as does the
cheap premium.
A cheap level term life insurance is recommended to run in
tandem with your mortgage. However, a cheap level term life
insurance policy can run differently from the term of your
mortgage. For instance, you could take out a 10-year level term
life insurance policy that is separate from any other cheap
premium life policy covering your mortgage. The premiums on the
10-year insurance policy will not be as cheap because the term
is short, but it will provide you with additional life insurance
cover in the unfortunate event of your death.
About the author:
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