Term life insurance pays out if you die while your policy is active.
It helps to give you peace of mind that expenses, like your mortgage and family living costs, are protected.
This guide explores how term life insurance works and the different policy options that are available.
Term insurance works by covering you for a set amount of time (the policy term).
You choose how long you’d like to be covered for, with most insurers allowing you to buy a policy that lasts between 1 – 50 years.
If you die during the policy term, your loved ones should get a a lump sum payment.
If you don’t die or fall terminally ill during the policy term, your cover will simply expire and your loved ones won't get a pay out.
*Get reward after 6 months of your policy being active. Can’t be used alongside cashback offers. T&Cs apply. **Restrictions apply, see https://www.amazon.co.uk/gc-legal
£75 gift card*
£75 gift card
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How much term life insurance you need depends on what you want your policy to protect.
The pay out from term life insurance could help to cover:
Why not use our life insurance calculator tool to work out how much term life insurance you might need?
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"Term life insurance offers cover for a set period and comes in two main types: level term, where the payout stays the same, and decreasing term, which often suits a repayment mortgage.
Reviewing your policy regularly helps make sure it still meets your family’s needs as life changes."
Yes, the pay out from your life insurance policy could be subject to inheritance tax.
When you die, the pay out from your policy will form part of your estate (your estate is made up of any savings, possessions and property you own).
According to current IHT laws, if your estate exceeds the threshold of £325,000, your loved ones will be subject to 40% inheritance tax.
However, you can write your policy in trust to prevent this from happening. When you write a life insurance policy in trust, it detaches the pay out from your estate.
Affordable cover – term life insurance policies are some of the most affordable life insurance options, with decreasing term life insurance usually being the cheapest.
Tailor your policy for your circumstances – you can choose a policy term and cover amount to meet your needs.
Extra safety nets – term life insurance includes terminal illness cover as standard. You can also choose to add critical illness cover for an additional monthly cost.
Get rewarded – When you buy term life insurance through Confused.com, you can choose a £75 voucher through Confused.com Rewards. You can claim your reward once you've paid 6 months of premiums.
Pays out an amount that decreases over time, usually in line with your mortgage
Pays out a lump sum if you're diagnosed with an illness covered by your policy
Covers your bills if you're injured or ill and are unable to work. Short term policies and longer ones available
Covers the cost of private medical care, helping you avoid NHS waiting lists to get the cover you need, quickly
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