Term insurance is the simplest kind of life insurance: you pay a premium for a fixed period, and if you die during that period your family receives the sum assured. If you survive, nothing is paid back. That is exactly why it is so affordable.
Why choose term insurance?
- High cover, low cost: the same premium that buys a small endowment policy can buy a far larger term cover.
- Clear purpose: it protects your family's income, loans and goals, nothing else.
- Fixed premium: usually locked when you buy, so starting younger costs less for the whole term.
Choosing the policy term
Choose cover that lasts until your responsibilities are likely to be over: loans repaid and children independent. For many people that means until age 60 or 65.
Riders worth knowing
- Accidental death benefit: extra payout if death is due to an accident.
- Critical illness: a lump sum on diagnosis of listed illnesses.
- Waiver of premium: future premiums are waived if you become disabled.
The one rule you must follow
Disclose everything honestly when you apply: smoking, alcohol, existing illnesses and other policies. Non-disclosure is a common reason claims are disputed.
See how much cover you may need with our life cover calculator, or read about term insurance.
This article is for general education only and is not personal financial, tax or legal advice.