Choosing the right policy

There are two types of term insurance policy. You can choose one that pays out a lump sum or the sort that pays out a guaranteed regular income.

Lump-sum policies pay out a cash sum when you die. They are useful if your dependents will need a substantial amount of cash in the first few months after your death.
They are also flexible because the sum can be spent or invested as they wish.
The policy will pay out the full amount of the lump sum you have insured for regardless of whether you die at the beginning or end of the term.

Family income benefit policies pay out a series of regular lump sums on your death which can be used as income for as many years as the policy has to run. For example, if you die after six years of a fifteen year policy, it will pay out for nine years (fifteen minus six).
These policies tend to be cheaper than lump-sum policies because the amount the insurer has to pay out decreases with every year of the term that you survive.
They are useful if your dependants do not have much experience of investing a large lump sum (e.g. young children) and so would prefer a regular income. They are also a good way of providing cover for a specific period - say until your children are no longer dependant on you.

Both lump-sum and family income benefit policies offer certain advantages, and there is nothing to stop you buying a combination of the two types to fund the different financial requirements your dependants might have.