The renewable option can only be added to a level term policy, (if this option is offered by the insurer).
However, a level term life insurance policy may not best suit your needs.
Depending on personal factors, such as your age, your health and what it is you’d like to protect there could be a better policy option out there for you.
Below you’ll see the main life insurance policy options and what they’re best for protecting.
Level term life insurance
With a level term life insurance policy, your sum assured remains fixed. This means no matter when you pass away your loved ones will always receive the same amount.
You’ll be covered for a specified period of time (the term) and a pay out will be made to your loved ones if you pass away during the term.
As discussed above (depending on the provider) you may be able to add a renewable option.
This option must be chosen when you take your policy out, it can’t be added during the term.
A pay out from a level term life insurance policy can be used to protect an interest only mortgage, cover funeral costs, cover family living expenses, or can be left as an inheritance.
Decreasing term life insurance
A pay out from a decreasing term life insurance policy will reduce over time.
This makes it ideal for covering a repayment mortgage as you can have your sum assured decrease in line with your mortgage repayments.
You’ll be covered for a set amount of time and your loved ones will receive a pay out if you pass away during this time.
Decreasing term life insurance tends to be the cheapest form of life insurance as your risk to the insurer decreases over time.
You won’t be able to add a renewable option to this type of policy.
Whole of life insurance
Whole of life insurance provides lifetime cover, guaranteeing your loved ones a pay out when you pass away.
You’ll need to pay premiums for the rest of your life in order to keep your cover in place.
Due to this, it tends to be well suited to those who’re later on in life and still in good health.
A pay out from a whole of life policy is typically left as an inheritance for loved ones to enjoy or used to cover funeral expenses.
As cover lasts for life, a whole of life insurance policy won’t offer the option to renew.
Over 50s plan
An over 50s plan provides guaranteed acceptance for UK residents aged 50 – 85, with no need to provide medical information.
This makes it an ideal option for those in this age bracket with less than favourable health.
It’s important to note that over 50s plans my include a waiting period.
This refers to the first 12 – 24 months of the policy where if you pass away due to natural causes, a pay out will not be made.
However, any premiums paid will be refunded.
It’s likely that your sum assured will also be capped at around £25,000.
An over 50s plan won’t offer the option to renew.
At Reassured our award-winning team can talk you through all the options that are available to help you find the right policy, at the best price.