Term Assurance

Approximate annual cost (gross) of £500,000 of term assurance for stated periods at ages shown.

Age (years) Term (years)

5 10 15

30 £1114.00 £1115.00 £1117.00

35 £1115.00 £120.00 £125.00

40 £125.00 £130.00 £140.00

45 £135.00 £150.00 £165.00

50 £160.00 £180.00 £11100.00

55 £11100.00 £11130.00 £11170.00

The rates shown are those applicable to men at the stated age. The rates for women are those applying to men four years younger than they are. Premiums are for 'age next birthday' and include policy fees.

The simplest form of protective assurance is term assurance, which as its name implies is cover for a specified number of years. The policyholder agrees to pay a set annual premium for this period, and if he dies within the

term his dependants get the stated benefit, while if he survives he and they get nothing. A standard set of terms (5, 10 and 15 years are the most widely quoted) are available from most life offices, but the majority of companies will also quote for any specific number of years if this is what you want. Approximate rates of premium at various ages are shown in Table 3. The escalation of rates with age and term is clearly shown, and reflects the pattern of the mortality statistics shown in Table 1 on p. 3.

Term assurance has many applications and there are several variations on the basic policy. The standard type of term assurance is known as level term, because the sum assured remains the same throughout the life of the policy. Its most obvious use is to provide a lump sum for dependants on the death of a breadwinner.


Learn More About Term Assurance

Short-term Protection

Pure Protective Life Insurance

The fundamental point about pure (or protective) life insurance has already been made. It is designed to protect, not to enrich, and works on the same basis as fire or motor insurance: unless a claim is made no benefit can be paid. There are a variety of policies suitable for different needs and situations. In setting premium rates for short-term protection policies, life insurance companies assess the likely pattern of deaths of policyholders from published Tables of Mortality, the likely pattern of interest rates over the period and the likely level of expenses,... see: Short-term Protection


Of interest