temporary life insurance?

spl2nh

Is it possible to take out life insurance for say a term of ten/twenty years but cancel it after two? Would there be any penalties? The aim is to provide a little security for my family during an unpredictable two years.

Thanks

dunstonh

Is it possible to take out life insurance for say a term of ten/twenty years but cancel it after two?

Yes.

Would there be any penalties?

No. Although a 20 year term assurance will be more expensive than a 2 year term assurance.

spl2nh

Wow, thanks so much for your reply. I didn't even think it was possible to take it out for such a short term. Will be on it straight away.

dunstonh

There is a risk going with a two year policy when it may be needed longer. If you suffer illness or need to extend it, the premiums will be higher and if the illness could be enough to become uninsurable.

If you have a 20 year need at this point, then you should insure for the 20 years unless you know for sure that it is going to be less.

rossbenn

If you knew that you only needed the protection for two years ( maybe ) you could consider taking out a policy for a term of ten years which has reviewable premiums. This would help keep the cost down and the first review would not be for ten years if you pick the right policy.
Or as dunstonh says just take out a two year policy, if it suits your needs.
When in doubt see an IFA.