If you're looking for a cheaper option for life cover, term life insurance could be an ideal policy for you. In this article, we'll learn more about how it works and the pros and cons when purchasing cover.

What is term life insurance and how does it work?

Term life insurance is a form of life insurance policy designed to provide financial protection for your loved ones in the event of your death. This type of policy covers you for a set period of time, for example 30 years. Unlike other types of life cover (such as whole life insurance) term life policies only pay out if you die within the policy term.

If you die during the policy term, your provider pays out a lump sum amount to your loved ones, providing financial peace of mind. If you survive the policy term the policy simply expires and you won't receive any money for the premiums already paid.

Once you take out a policy, you are required to pay monthly premiums throughout the specified policy term. Failure to keep up with these monthly payments can result in your cover being ended early. You can find out how much your monthly premiums will be by applying for a quote.

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Types of term life insurance

There are three types of term life insurance cover:

  • Level term - The standard for term life cover. The value of your policy's pay-out amount and premium cost (when you opt for guaranteed premiums) are fixed throughout the term.

  • Decreasing term - Typically used to cover large debts, for example a  repayment mortgage. The pay-out value of your policy decreases over the term of the policy, usually by a set percentage agreed at the outset of your policy.

  • Increasing term - Designed to help protect the eventual pay-out value from inflation. The pay-out amount increases over time - however, you should be aware that your premium will increase too to account for this.

You can also buy a joint life insurance policy. This provides cover for both you and your partner under a single policy. Not only can joint cover be easier to manage, it can often be cheaper than buying two separate policies.

Joint policies typically work on a first death basis, in which the policy pays out after the first death of a policy holder. The policy then ceases, so the surviving policyholder would need to buy further cover if needed.

Products & Services from the leading financial brands

  • Zurich
  • Legal And General
  • Aviva
  • AIG
  • Beagle Street
  • LVE
  • Royal London
  • Vitality Life
  • Virgin Money
  • Budget Insurance
  • Scottish Widows

What are the pros and cons of term life cover?

There are a number of positives for buying a term life policy. But like most things in life, it has its disadvantages too...


  • Cheaper premiums: Term life insurance is ideal for those who cannot afford permanent life cover. Opting for level term cover can often allow you to lock-in a cheap premium rate, saving you money over time. Learn more about how to get cheap life insurance.

  • Offers flexibility: With a term life policy, you choose how long your policy lasts for, as well as the payout value of the policy itself. For example, if you're looking to cover a mortgage, you can choose a policy length that lasts until your mortgage has been paid off.

  • Can cover a range of finances: Among many things, the pay out from a term life insurance policy can help your family with future costs, such as:


  • Only provides temporary cover: Term life policies only last for a set period of time. If you're looking for permanent cover, you should look into whole life insurance. Although this type of cover is more expensive, it protects you for the rest of your life.

  • No guaranteed pay-out: As previously mentioned, term life insurance will only pay out if you pass away within the policy term. If not, the policy expires, and you will have to take out additional cover if required. Whereas whole life insurance policies pay out regardless of when you die.

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Where can I get a quote for term life cover?

At Cavendish Online, we've provided 3 routes to get your perfect quote. You can either apply over the phone or use our online quote service. Our aim is to help you find the right policy that matches your family's needs and budget. Learn more on how to apply.

When applying for a quote, we'll need to take some basic information, such as:

What happens if I can't pay my premiums?

If you are unable to pay your premiums, there are usually a few options available.

For example, if you are struggling to pay your premiums because you’re currently off work ill, and your plan includes waiver of premium, your insurer will cover your premiums for you and you won’t lose the cover.

Alternatively, they may be able to grant you some sort of payment holiday or repayment plan.  

It’s important to speak to your insurer before making any decisions about your policy. They will be able to provide more information and advice on what options are available.

Get an online quote in minutes, or get in touch with one of our specialist advisors by calling 01392 241 850.

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