Can term life insurance have cash value
TL;DR
Term life insurance covers you for a set number of years and pays a lump sum if you die during that term. In the UK it’s commonly set up as level term or decreasing term (often for a mortgage). It’s usually the most cost‑effective way to protect your family for a specific period.
Term life insurance covers you for a set number of years and pays a lump sum if you die during that term. In the UK it’s commonly set up as level term or decreasing term (often for a mortgage). It’s usually the most cost‑effective way to protect your family for a specific period.
Key Points
- Life insurance pays a tax-free lump sum to your beneficiaries
- Term life insurance covers you for a set period (e.g. 25 years)
- Whole of life insurance covers you for your entire life
- Decreasing term is commonly used for mortgage protection
Who Is This For?
Life insurance is particularly important if you have a mortgage, dependants, or anyone who relies on your income. If your death would cause financial hardship for others, life insurance provides essential protection.
Next Steps
Our FCA-regulated advisers can help you find the right life insurance policy for your circumstances. We compare the whole market to find cover that fits your budget and protects your family.
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Content reviewed: January 2026