One of the most popular types of life insurance is called ‘term’ insurance. This pays either a lump sum or a regular income if you pass away within an agreed period (or 'term'), depending on the type of policy as explained below;
The two main types of term life insurance cover are: level-term insurance and decreasing cover insurance.
Level-term insurance covers people for a period of time and typically offers a fixed lump sum of money to a dependent if you pass away during that time period. You could choose this to ensure your financial commitments, such as childcare costs, can still be paid.
Decreasing cover is a type of insurance that’s often (but not always) bought to clear a specified debt that itself decreases over time. This type of cover is often taken out to cover mortgage repayment costs.
There are many other types of life insurance to think about, including critical illness cover and whole of life insurance.