Purely for your peace of mind

Term assurance is best used when taking out a loan or mortgage to provide a capital sum

WHEN most us talk about life insurance, we usually mean with-profits endowment policies. Many people don't realise these are a conservative form of investment, writes Tony Lyons.

We pay our premiums on a regular basis, expecting after 10, 15, 20 or 25 years to collect a lump sum made up of the sum assured - the minimum guaranteed to be paid on premature death - and the bonuses that have been attached to the policy over the years.

There are better ways of building up a nest egg and you can buy life insurance that offers pure protection, with no investment element at all. The premiums are much cheaper than they are on with-profits policies. Called term assurance, these policies will give no pay-out at all except in the case of death. If you survive to the end of the term, you get nothing back except the satisfaction that your family and dependants would have been protected against financial hardship if you had died.

Term assurance is best used when taking out a loan or mortgage to provide a capital sum. Or it could be used just for peace of mind. To give an idea of cost, a 30-year-old male non-smoker could expect to pay around pounds 5 and pounds 7 a month for a sum assured of pounds 50,000 over 20 years with level- term assurance.

Women have a longer life expectancy than men, so pay less - between pounds 4 and pounds 6 a month for the same sum insured. Premiums increase significantly with age. A 50-year-old male non-smoker should expect to pay between pounds 16 and pounds 22 for the same sum assured over 10 years. A woman should expect to pay pounds 4 to pounds 5 a month less.

Some of the most competitive rates are offered by Equitable Life, which is usually the cheapest company in the market, Eagle Star, Legal & General, Scottish Widows, Virgin Direct and Standard Life.

The market for term assurance is competitive and premiums fluctuate. An independent financial adviser will tell you the best rates, or check the papers for low-cost firms that sell insurance direct to the public.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before