Consumers more fond of term life insurance
Life insurance is a very popular and beneficial form of insurance cover, and there are two types of life insurance that are available, which are term life insurance and whole of life insurance. According to a recent report the popularity of term life insurance in the UK is soaring compared to whole of life cover, with consumers appearing to favour the cost efficiency and simplicity that comes with term life insurance cover compared to the latter.
Term life insurance cover is a type of cover that is offered for a set period of time, such as fifteen years. The insurance premiums and the cover will both cease at the end of the term or when a claim is made, and there is no investment or element or cash back element at the end of the term. The life insurance will pay out if you die during the term of the cover, subject to terms and conditions, and the premiums for this type of cover are lower and more affordable for many consumers.
Whole of life insurance cover provides cover on an ongoing basis, thus guaranteeing a payout at some point subject to terms and conditions. However, the cost of this cover is far higher than term life insurance cover, and this often puts consumers off. As a result of this the majority of life insurance customers in the UK now favour term life insurance, finding it easier to understand, more affordable, and simpler than whole of life cover.
Experts have warned, however, that there is a downside to term life insurance cover. Once the term of the cover ends the policyholder is left without any life insurance and must them hunt around for new policy. However, often this becomes more difficult and expensive, as by this time the consumer is older and may not be as healthy as when he or she took out the original policy.