Term life insurance is one of two types of life insurance the other type of life insurance is mortgage life insurance. While mortgage life insurance is decreasing, term life insurance is level meaning that the payout will remain the same over the course of the life insurance plan.
With term life insurance the beneficiary would receive the same payout if the insured was to die towards the end of the life insurance plan as they would if the insured was to unfortunately die a short time after taking out the life insurance plan. If a payout was agreed at £100,000 over a life insurance plan of 30 years then the beneficiary would receive £100,000 if the insured was to pass away at any point during the 30 year life insurance plan. If the insured continued to live past those 30 years then the insured and the beneficiary wouldn’t receive a payout.
The payout from term life insurance is meant to help the beneficiary pay off any debts the insured may have had and if the beneficiary was a living spouse then they may wish to pay off any mortgage that may have been on their home together, giving the spouse one less thing to worry about, as with the loss of their loved one, they may now struggle to maintain everyday living costs.
Many people would recommend term life insurance due to the payout staying level meaning you know exactly how much the beneficiary will receive when you pass away.