Term life insurance is a type of life insurance that pays out a lump sum of cash when the policyholder dies or when they are told they have a terminal illness. But even though term life insurance is cheap—you can get coverage for as little as GBP5–GBP10 per month—surprisingly few of us have it.
People who have a mortgage and a family to take care of face a big financial risk if they don't have term life insurance. When you think about how the mortgage and other bills would be paid if the main source of income died or got very sick, this risk becomes clear. The end result could be that the home of loved ones who are left behind is taken away because they can't pay their mortgage.
Some people get a mortgage life insurance policy in case something like this happens. This is great for paying off the rest of the mortgage loan, but where will the money come from to pay the gas and electric bills and the council tax bill every month, let alone the money needed to pay for the policyholder's funeral costs? At this point, a term life insurance policy would be very helpful.
If you don't already have a term life insurance policy, here are some sobering reasons why you might want to get one now...
CANCER: One in three people will get cancer at some point in their lives. Cancer research is always going on, and some cancers may one day be able to be cured. In the meantime, a term life policy can protect the income of loved ones left behind if you are diagnosed with cancer and die from it.
HEART DISEASE: More than 35% of all deaths in the UK each year are caused by heart and circulatory disease. The number of people who die from heart and circulatory diseases is going down, but the number of people who become morbidly obese is going up. This could mean that this trend will change soon. Term life insurance can be set up to pay out if the death was caused by the heart.
MRSA (SUPERBUG) - In the last 4 years, the number of deaths caused by the MRSA superbug has doubled. MRSA is an infection caused by bacteria that can't be cured with antibiotics. It often kills people with weak immune systems, so it's easy for it to spread among sick and old people in hospital wards. If MRSA is the cause of death, many life insurance policies will pay out.
AVIAN FLU (BIRD FLU) - Society of General Microbiology in the UK said that a highly contagious strain of mutated Avian Flu could kill 2 million people in the UK. This caused a lot of controversy. If you are worried about the Avian Flu, check with your life insurance agent to see if their term life policy covers such a situation.