There is no cash-in value, which is why it is the cheapest form of life cover.

Premiums have been falling in recent years, so it is quite possible to lower the cost of your current policies by replacing them with new policies at the lower rates. However, under no circumstances should you cancel an existing policy until you have written confirmation that your new policy is in force.

Term Assurance can be bought on a level basis, with a fixed amount of cover for the term of the policy, or on a decreasing or increasing basis. Decreasing term assurance is often referred to as Mortgage Protection, as cover reduces broadly in line with a repayment mortgage.

The following diagram shows how the amount of cover differs over time between these types of insurance:

The very cheapest form of life cover is known as Family Income Benefit. This type of cover provides an income in the event of death, for the remaining period of the policy. So, for example, if a 20 year policy was taken out, and you died after fifteen years, the policy would pay an income to your dependents for the remaining five years.

At extra cost it is also possible to make term assurance renewable, thus guaranteeing cover in future years regardless of your state of health at that time in the future.