More consumers in the UK are choosing to take out term rather than whole of life insurance products, it has been claimed.

According to the Motley Fool, term insurance promises to pay out a lump sum if the holder dies within the period of cover, while whole of life insurance promises to pay out a sum whenever the holder dies as long as the premiums are paid.

Steve Wroe, a spokesperson for Life Direct, said that many people are unaware that they can now get guaranteed premiums on a whole of life policy, so consumers can rely on a degree of protection against rising costs.

“Life insurance is just about peace of mind and the trouble with a term policy is that one day that policy is going to stop working for you,” Mr Wroe argued.

When the term runs out, people may find they are uninsurable because they are too old or are in ill health, he said.

However, Mr Wroe acknowledged that there are “pros and cons” of both types of life insurance products, thus consumers should consider their own circumstances and requirements.

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