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Term Life Insurance
Protecting what matters most.
Editorial Staff
Last Update: Aug 2022
Term Life Insurance is beneficial for those looking to protect their family from any potential financial hardship that comes with an unexpected death.
A Term Life Insurance policy is often most useful for those with young families or dependents that need to be covered until they may be able to provide for themselves financially.
What is Term Life Insurance?
A Term Life Insurance policy will pay out a lump sum should you die during the term of your policy.
Term Life Insurance provides a cost-effective and simple way of providing for your family should you pass away. Having the peace of mind of knowing your family will be covered financially is one of the key motivators for those taking out a Term Insurance policy.
The term itself will differ from policy to policy. For example, you may take out a Term Life Insurance policy on your own life for €200,000 over 20 years. Should you die within this 20-year term, your policy will pay €200,000 to your dependents.
If you do not die within the term agreed in the policy, no benefits will be paid and the policy ends
Are there different types of cover available?
Within Term Life Insurance, there are different types of coverage to choose from. These include:
- Single cover – This is designed to cover one person only. Should you die during the agreed term, your beneficiaries will be paid a lump sum.
- Joint cover – This will cover two people. Often payment will be made on the first death.
- Dual cover – This also covers two people. The insurer will pay out on both the first death and also the second if both are within the agreed policy term.
What is Convertible Term Life Insurance?
Convertible Term Life Insurance allows you the opportunity to extend your current policy into a new policy without having to undergo a medical examination.
This means you can take out your policy, enable the conversion option and have peace of mind knowing you can extend a later date.
It also means the insurer must offer you cover based on your health when you initially took out the policy. Any subsequent health issues must be disregarded.
It is strongly recommended that you add a conversion option to your Term Life Insurance policy.
If you are still unsure of how convertible Term Life Insurance works or whether it is the right option for you, feel free to contact our team.
Who may need Term Life Insurance?
There are many situations where having a Term Life Insurance policy is important.
Anyone with a financial dependant(s) should consider taking out a policy. Other situations where you may need Term Life Insurance include:
- You have a family who relies on you financially.
- You have any loans or outstanding debts that could not be paid if you died.
In particular, anyone with a young family should have some sort of financial protection in place should something happen.
Who receives the benefits from a Term Insurance policy?
Benefits will be paid out depending on how the policy is structured. If the policy is on your own life, it is paid to your estate or the named beneficiaries.
In a joint life policy, the benefits are often paid to the surviving policyholder on that policy.
What affects the cost of a Term Life Insurance policy?
There are certain factors that affect the cost of any insurance policy. These include:
- Age – The older you are when taking out a policy, the higher your premiums are likely to be.
- Policy term – The length of the policy term affects the cost. The longer you are insured, the more expensive it becomes.
- Smoking status – If you are a smoker, your premiums could rise by between 25-50%.
- Health – Any previous or current health conditions may affect the cost of your policy.
- Occupation – If you work in what is considered a hazardous occupation, this will impact your premiums.
- Conversion option – Adding a conversion option to your policy will increase the cost due to the additional benefits.
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What should you consider before taking out a Term Life Insurance policy?
Before taking out a Term Life Insurance policy, it is worth consulting a financial advisor. There are several variables to be accounted for and no two situations are the same.
Depending on the age of your dependents and overall financial circumstances, you may need more or less cover than the average person. In some cases, a whole of life policy or serious illness cover may be more suitable.
When making a decision to protect your family, it is vital you get the cover that is right for you.
In these circumstances, expert advice is invaluable. At emero, we offer a complimentary consultation and can guide you through potential options. This will ensure that you get the right cover for your specific situation.
Feel free to contact our team to assess your options.
Key Takeaways
- Term Life Insurance will only pay out if the policyholder dies during the term agreed in the policy.
- Within Term Life Insurance, there are different types of cover available such as single, join, and dual.
- Adding a conversion option to your policy is strongly recommended.
- Always speak to an advisor when assessing what type of policy may be best for your situation.
