UK term insurance is the cheapest and most basic form of life insurance. Through UK term life insurance, one can ensure that his/her family receives a lump sum amount if s/he dies during the period of the policy.
Despite the advantages of life insurance, a significant number of people in the UK do not opt for any cover. According to Barclays research published in November 2008, 47% of UK adults have no insurance, while 52% do not have any life insurance cover. The survey also indicated that while 75% of the people in the country had no critical illness cover, 78% were without any income protection cover.
UK Term Insurance: Types
A UK term insurance policy can be of three types:
Level term insurance: This policy begins with a fixed insurance sum. This amount remains constant and is paid to the beneficiaries in a lump sum in case the policyholder dies during the term of the policy.
Decreasing term insurance: In this policy, the insured amount declines by a certain figure during the term of the policy and drops to zero by the end of the term. If the policyholder dies before the end of the term, his/her family receives whatever is left of the insured amount.
Family income benefit: Through this policy, one can ensure that his/her family receives regular income instead of a fixed amount. However, the income is paid till the term of the policy ends. So, if a person with a 20-year UK term policy dies 15 years after purchasing the policy, the beneficiaries will receive regular income for five years.
UK Term Insurance: Plans
There are various types of plans available for UK term insurance:
Single life: Under this plan, the death benefit is paid on the death of the policyholder.
Joint life first death: The death benefit is paid at the time of the death of the first policyholder.
Joint life last survivor: In this plan, the benefit is paid at the time of the death of the second policyholder.