A: The most frequent reasons people take out life assurance are to pay off debts upon their death - such as a mortgage - or to provide a lump sum payment when they die to their dependants, thus ensuring their dependants are financially secure and able to maintain their standard of living. In effect, it replaces the lost earner's income.

A: This is where your personal financial circumstances come into play. You need to look at several factors such as: The level of income your partner would need to survive comfortably on and for how long would they need that level of income? Other factors like your age, the number of your dependants and your current income and outstanding debts will all be assessed by the insurer who decide the premium.

As a general guide, consider taking your life assurance for between 5 and 10 times your current net salary after tax.

If you are using life assurance to cover the repayment of a mortgage, the initial sum insured must equal the value currently outstanding on your mortgage.

A: Look at term life assurance - it's the simplest form of life assurance cover, providing a pre-determined level of cover (the "sum insured"), based on the premium payable.

There is no investment in the life assurance policy, therefore, should you survive the policy term (the length of time that you wish the life assurance policy to cover), then no money is payable to you.

There are various different Term Life Assurance contracts, providing flexibility to meet a person's needs and circumstances. Typical life assurance policy terms range between 15-20 years and you choose for how long you want the life assurance policy to run.

A: As term life assurance policies contain no investment element and are classed as 'qualifying' life assurance policies they are free of income tax and capital gains tax.

A: Before a term life assurance policy may be classed as qualifying and its proceeds paid free of tax, it has to pass certain tests. If the term life assurance is less than 10 years:

The proceeds of some term life assurance policies are tax-free irrespective of these qualifying rules. They include decreasing term life assurance policies used exclusively for mortgage protection and term life assurance that is part of a tax-exempt friendly society savings plan.