Is term life insurance worth it?

When it comes to life insurance, knowing which type of policy is right for you and whether taking out coverage is worth it can be tricky, particularly since there are so many different options on the market. And, to make it even more complicated, not everybody’s situation is the same, so a policy that one person might consider worth it, wouldn’t benefit someone else. This is why it’s crucial to carefully assess your own needs and financial goals before making a decision. 

In this article, we’ll help you to better understand what a term life insurance policy is and answer the question, is term life insurance worth it?  

Continue reading or click on the links below to jump to a relevant section: 

• What is term life insurance? 
• What features does term life insurance include? 
• What isn’t included? 
• Is term life insurance worth it? 
• Where can I buy term life insurance? 

What is term life insurance? 

To be able to weigh up the benefits of term life insurance and whether it’s the right policy for you accurately, the first step is understanding exactly what this type of policy is.  

Simply put, term life insurance is a type of life insurance that provides coverage for a specific period, or ‘term’, which is usually a shorter timeframe than standard life insurance would cover.  

For example, the Save More Money Term Life Insurance policy will cover policyholders for a 12-month period.  

Those who opt for this type of policy are typically only looking for short-term cover for a specific reason, such as a brief move abroad that wouldn’t be covered by standard life insurance.  

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See also: How much is life insurance for over 50s?

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What features does term life insurance include? 

The main feature of a term life insurance policy is a lump-sum payment, called a death benefit, that your beneficiaries would receive if you were to pass away during the term of the policy. This money can be used for things like paying off debts, covering living expenses or funding a funeral.  

However, as we’ve already briefly mentioned, there are many term life policies available online offered by a range of different providers. Therefore, the features included in a policy can differ depending on which insurer you choose.  

And, while policies can vary, to give you an idea of the type of features you might expect to be covered, here are some of the features which you are most likely to find: 

• Coverage for UK residents moving abroad 
• Cover for most types of jobs (even those typically considered high-risk) 
• Cover for those working offshore 
• Immediate coverage and no extended waiting time for the policy to come into effect 
• Customisable coverage that allows you to choose the amount of coverage that fits your needs, whether it’s a smaller policy to cover final expenses or a larger one to provide substantial financial support for your family 

Some policies will also offer you the option to convert your policy to a permanent life insurance policy before the term ends, allowing you to extend coverage without a medical exam. 

What isn’t included? 

Like with all insurance policies, there will be limitations and exclusions to you term life policy. And, while these can differ depending on your coverage, most policies won’t cover you for: 

• Death resulting from involvement in any criminal activity   
• Death resulting from suicide (in the first year of cover)  
• Death resulting from the taking of alcohol or non-prescribed drugs  
• Death resulting from terrorism  
• Death resulting from war (whether declared or not) 

Some policies might also put age restrictions on a policy, meaning not only do you have to be 18 to purchase coverage, but if you are older than a particular age, you will no longer be eligible for a policy.  

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See also: Can I get life insurance with a high BMI?

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Is term life insurance worth it? 

Determining whether term life insurance is worth it depends on your individual circumstances. There’s no one-size-fits-all answer, as what might be beneficial for one person may not be for another. 

However, to help you decide whether a policy would benefit you, here is some information you might want to consider: 

Term life insurance is generally affordable, making it an attractive option for those needing temporary coverage. In the UK, premiums can start as low as £5 per month (Which, 2024), offering a payout up to £100,000.  

This relatively low cost for significant coverage makes it a worthwhile consideration for those with dependents or financial obligations, like a mortgage. However, if you outlive the policy term, no payout is made, meaning the premiums you’ve paid won’t result in any financial return. 

And, beyond cost, there are other factors that may make term life insurance worth it. For example, if you have young children, a term policy can provide financial security until they’re grown up. It’s also a beneficial financial safety net if you have large debts, ensuring they won’t burden your family.  

Where can I buy term life insurance? 

Thanks to all the options offered by online providers, finding and purchasing a term life insurance policy is typically a straightforward process. But, before making a decision, it’s important to carefully review the terms and conditions of each policy to ensure it aligns with your needs and financial goals.  

Not all policies are created equally, and coverage features and costs can vary widely. Therefore, thorough research is crucial to securing the best policy for your situation.  

And, if you’re not sure where to start, but think a term life insurance policy would benefit you, why not consider purchasing a term life insurance policy from Save More Money?