Rather than paying out a lump sum should you die during the selected term, this type of policy pays out a regular tax free income for your dependants for the remainder of the plan term. This income can be paid monthly, quarterly or yearly.
The level of income will usually remain the same throughout the policy term. However, you can also arrange to have the amount of income increase over the term in line with inflation (at an additional premium).
As the income is only paid for the term remaining on the policy, you may need to make additional arrangements to go on providing an income after the policy expires.
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