Guide to Term Assurance
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What is Term Assurance
It is a Life Assurance plan that pays out a guaranteed amount if you die during the term of the policy, but if no claim is made during the policy term the policy ceases without value.
What is the difference between Life Assurance and Life Insurance
The terms tend to mean the same thing these days. Technically, Life Assurance is regarded as cover for the entire life of the individual, paying out upon death, whereas Life Insurance is life cover for only a specific period, such as for the duration of a mortgage.
Can a Life Insurance plan be taken out as a joint plan?
Yes, however:
- A joint policy will normally pay out on the first claim only.
- The survivor will no longer have that cover and may not be able to replace it due to changes in health.
- Policies can be written on a second death basis particularly where tax planning in concerned.
Will the insurance payment be subject to tax?
Under the present rules, no tax will be deducted from the claim payment. However, depending on your individual circumstances, life insurance claims may be subject to inheritance tax as part of your normal estate and that the level's, basis and relief's from taxation may be subject to change. (Please contact us to see whether or not the policy can be written under trust to avoid part or all of the benefit being subject to inheritance tax)