What is level term life insurance and how does it work?
Level Term life insurance is a policy where your cover amount you have chosen doesn’t change. It remains ‘level’ throughout the duration that you have the policy. This means that your premiums are fixed for the length of policy. The price you pay doesn’t increase or decrease as the policy term progresses.
If you don’t pass away before the policy ends and you want to remain insured. You will need to take out another life insurance policy. However this will be based on your age, health and lifestyle at that time.
Should I choose Level Term Life Insurance?
A Level Term policy might be suitable for you if you’re looking to protect more than just your mortgage. Level term policies tend to be more expensive rather than a decreasing term policy, which is used usually to pay off a mortgage. However the sum assured does not decrease and can be a suitable way to pay off debts, as well as providing a lump sum to your loved ones.
What are the benefits?
As the policy remains level throughout, this means that the sum that you are protecting doesn’t change and neither do the premiums. This means you’ll always be paying the same amount for your life insurance cover. It won’t decrease or increase as time goes on.
A level term policy could be a suitable choice if you wish to leave a lump sum to your loved ones.
Are there any considerations with a Level Term policy?
A Level Term policy might actually give you more cover than you need. You may think you’re doing your family a favour by getting life insurance cover for hundreds of thousands of pounds. But all this does is drive up your monthly premiums which may result in your cover lapsing if you can’t afford to keep up the payments.
Our specialist advisors will be able to advise the benefits of each type of policy.
A Decreasing Term policy may be more suitable if you’re looking to only cover the costs of your mortgage. It may work out to be more cost effective than a level term policy. A decreasing term policy is only suitable for repayment mortgages and not interest-only mortgages.
Level term policies do not cover you for life. If you don’t want to limit the period of time which you’re covered for, a Whole of Life policy might be worth looking into.
Can I take out a Joint policy?
At life insurance cover we search the entire life insurance market to offer all levels of cover you may need. You can purchase a level term policy for yourself or for you and a partner – known as a single or joint policy respectively. A consideration with a joint level term policy is that when either of the two holders of the policy die, the other person will not be covered by the joint policy any longer and will require a new policy to make sure they’re protected.
Bearing this in mind, it may be more beneficial to set up two single level term policies. Ensuring that no matter what happens, both partners are protected. In some cases we can set up joint policies that pay-out once the second person dies. If this is something you’re interested in, we can help set this up for you.
What affects the cost of policy?
As with all life insurance policies. Your health and lifestyle will influence your monthly premiums and how much an insurer is willing to cover you for. Factors like smoking, height and weight, a history of illnesses and more will contribute towards how big a risk you are to an insurer.
How do I get the best protection for me?
Taking out a policy with Life Insurance Cover couldn’t be simpler. Simply complete our quote form and our specialist advisors will be able to help you.