Will I Save Money With a Term Life Insurance Policy?

Life insurance policies come in various policy options, so you have plenty of choices when looking for a policy that can give you both the peace of mind to take care of your family and not stretch out the budget too far.

Understanding these policies, benefits, and drawbacks will help you make the proper decision.

The Whole Life Insurance Option

This type of policy is the most expensive, but it also has the most benefits. This type of insurance can also be obtained as a type of investment for the holder. Policies can usually be cashed in before death for their value (meaning the value the holder has paid into the policy). This option is not affordable for many, so they choose one of the two remaining types of policies.

What About Universal Life Insurance?

This type of policy is not as common in the UK as it is in the United States, but they are still available. In addition to being cheaper than whole life, there may also be some restrictions pertaining to how the policy can be cashed in. However, like the Whole Life Policy, this type of insurance will hold cash value.

Term Life Insurance Policies

This is the most common and popular policy, mostly because it is financially friendly. However, the downside is that the terms can be very restrictive, and like its name, the policy is only good for a specific period of time.

Unlike the options listed above, the policy has no cash value. However, it will offer you and your family peace of mind during the policy’s term.

The costs of a term policy are far lower than any other type of policy available. For instance, a whole life insurance policy of £100,000 would cost about £75/month for someone in his or her late 20s or early 30s who is in exceptional health. The same term life insurance policy would probably cost less than £10/month for the same coverage.

While some companies will allow a policy to be secured without a medical exam, most will require some type of physical to establish the premium. In addition, the actual term available may be age-restricted. For instance, securing a 20-year term life insurance policy at the age of 35 will be fairly simple. Securing life insurance coverage at 70 can be a little more time-consuming but achievable.

So, to answer the initial question, yes, buying term life insurance will save you significant money, but you need to ask yourself if it will provide everything you need for the amount of time needed. Remember, though,  you can always add additional coverage down the road when finances are better if you so desire.

If you would like more help deciding what type of life insurance policy is best for you, contact one of our Insurance Hero policy specialists today.