This is life insurance that runs for a set period of time. It is the simplest and one of the cheapest forms of life insurance.

Before you arrange a policy, you will need to choose:

Once you decide on the sum assured and the term, your premium is fixed for the term of your policy. If you die before the end of your chosen policy term, the sum assured will be paid to your estate. If you don't die during the term, no benefit is paid out and the policy will end.

The premium and the sum assured are fixed for the term (except for index-linked policies, which are explained further on). Most term life policies cover your death and terminal illness as part of the standard cover. Cover for terminal illness means that your policy pays out a percentage (usually around 80%) of the sum assured if you develop an illness and are diagnosed as having less than 12 months to live. The rest of the policy benefit (around 20%) would then be paid out once the insurer receives proof that you died within the term of the policy.

An advantage of this is that getting part of the payment before your death could help pay for medical treatments or nursing care.

What other benefits can I get with Term Assurance?

Depending on the insurance company, you may be able to add some or all of the following benefits:

You will usually have to pay a higher insurance premium for each of these benefits.