When you take out life insurance, this usually means that you are covered for a certain amount of time.
When you apply, you choose the ‘term’ of the policy, such as 25 years. If you die within the term chosen, your loved ones could receive a cash sum. However, if you survive the term, the policy will end and no cash sum will be paid out. You may wish to select a policy that will last until your retirement age or until your children are no longer financially dependent.
Life assurance policies offer insurance cover for the whole of your life, rather than a chosen policy length. A life assurance payout is tax-free, and provided the premiums have been paid, a claim can be made upon the death of the insured person. You’ll have the advantage of guaranteed cover for as long as you need it, but the reality is you’ll pay higher premiums for the privilege.