Term Assurance

Also known as Level Term Cover – this life insurance policy is taken out for a specific term. The main difference between Level term life insurance and Mortgage Protection is that the level of cover does not reduce with term assurance.

Example: Tom & Mary have two children under 4. They want to protect their family’s financial security in the event of one of them dying. They start a Level Term Life insurance plan for 25 years. They decide on a level of cover of €300,000. In year 23, Mary has a major stroke and dies. The life insurance company will pay out the full €300,000 to Mary’s estate.

Convertible Term

Convertible Term Life Insurance is almost the same as Level Term Life Insurance – but it has an added benefit – a Conversion Option. A conversion option is a very valuable benefit which allows you to “convert” your policy to another plan, at any stage throughout the term of your policy, without providing any evidence of health.

Example: Tom and Mary have a Convertible Term Life Insurance policy with 3 months remaining. Mary has been diagnosed with  cancer and is very seriously ill. They use the conversion option on the policy to start a new policy for another 20 years. The insurance company do not look for any medical details – they assess you based on your health when the original policy was taken out. The premium payable is based only  on their current age. Tom and Mary now have the peace of mind of knowing that they still have life cover.

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