Term assurance is similar to car insurance in that so long as you continue to pay the premiums then you are covered in case you die. Also similar to car insurance the term assurance runs for a pre-determined period, some up to 35 years, but the shortest term is normally 5 years. At the end of the term if you are still alive the insurance ends together with your premium payments and there is no maturity value to come back.

Broadly there are three different forms of term assurance, with the cheapest normally being Family Income Benefit (FIB) as this is for a set term and promises to pay a monthly income to your spouse or other nominated beneficiaries for the remaining term of the policy from your date of death.

Then there is Decreasing Term Assurance (DTA), which many people have to cover their mortgage in case they died before completing the mortgage term, as DTA is for a set term but the sum assured decreases each month as your outstanding mortgage decreases. Again this is pure protection with no investment content so there is no maturity value at the end.

Finally, there is straight forward Level Term Assurance (LTA) which is often used as the main family protection product over and above what you might already have covering your mortgage or death in service benefits from your employers scheme. LTA is taken out for a set term with no maturity value at the end.