Level Term Life Insurance

If you have a family or loved ones who depend on your income, life insurance, also known as life cover, can provide for them should you pass away.

There are two main types of life insurance; term life insurance and whole of life insurance. (otherwise known as life assurance, since you’re assured a payout). A term insurance policy provides financial protection over a fixed period of time (the term) and if you die within that time, your beneficiaries will receive a lump sum.

What is level term life insurance?

Level term life insurance is a type of term insurance policy. With level term life cover, you decide on the amount your loved ones will receive in the event of your death. The lump sum to be paid out stays the same for the duration of the policy and usually your premiums will stay the same too.

How many years does level term insurance cover me for?

You set the term at the beginning of the policy. The length of policy you decide on will depend on why you need cover. For instance, you might want it to last until your children finish full-time education or until your partner reaches pensionable age. 

The cost of the policy tends to be lower if you take it out at an earlier age. This means it can be much cheaper to take out life cover under the age of 30 than waiting until later. A typical policy length is between 10 and 25 years, but policy terms can range anywhere from between five and 50 years.

Should I choose single or joint level term insurance?

Couples who both want to be covered might consider joint life insurance. Most joint term insurance policies only pay out once, on a ‘first death’ basis. After this, the plan ends and the surviving partner is no longer covered. At this point you may be in your later years, and our guide to life insurance for the over 50s explains what options are available.

If you have different protection needs from your partner - for example, if one of you has a much higher income than the other - it’s wise to have different levels of cover. Two single life insurance policies are often no more expensive than having joint cover and can mean that the surviving partner will still be protected.

If you’re not the main earner, you may think that you won’t need life insurance, but it’s a good idea to think about how your family would cope if you were to pass away. A payout can mean the family would be able to manage financially if your partner had to leave his or her job to look after children or other relatives.

It’s also a good idea to compare life insurance quotes with a number of providers to find a policy that suits your individual circumstances and budget.

How much does level term life insurance cost?

The cost of level term life insurance has a number of variables depending on your situation. These include:

• The length of time you would like the cover for
• Your occupation
• Your lifestyle
• Your medical history
• Your age
• Your smoker status.

What are the alternatives to level term insurance?

There are several different types of life cover that suit different situations. With decreasing term insurance, the lump sum to be paid out reduces over time. This type of policy can be suitable if you think the financial needs of your dependents will decrease as time goes on; for example, if the remaining balance of a mortgage is set to reduce in line with each year of the insurance policy. 

Unlike term insurance policies, which cover you for a set period, whole of life insurance covers you for your entire lifetime and is also known as life assurance, as the payout is assured. Because they provide a guaranteed payout, these policies can be more expensive than term insurance policies, but provide peace of mind that a lump sum will be paid.

Critical illness cover is often bought as a package with life insurance. This provides a payout if you’re diagnosed with a serious illness.

Your needs may change over time, so it’s a good idea to review your protection insurance every now and then to make sure you have the right cover in place. If you’re unsure which insurance is right for you, you can speak to our expert team on 0800 862 0373.

Why compare level term life insurance with Active Quote?

Buying any type of life insurance can feel daunting, but at Active Quote, we understand the importance of finding the ideal coverage for you. We like to ensure that you feel supported throughout the whole process,  our policies are easy to understand and available for online purchase, but our outstanding advisors are ready to assist you with any questions over the phone. With our top-ranking customer review status, you can trust in our expertise and our unwavering commitment to your peace of mind.

With ActiveQuote you can:

• View more than 50 quotes online
• Compare the UK’s leading insurers
• Tailor your quotes online with live price updates
• Buy your chosen term life insurance online

Get free advice from a level term life insurance specialist.

Level Term Life Insurance FAQs

What are the benefits of a level term life insurance policy?

The pros to a level term life insurance policy include:

• Fixed premiums - you’ll know exactly how much you will be paying towards your insurance each month
• You know the total amount you would be getting from your policy should you need to claim.
• Level-term life insurance offers flexible term options making it cheaper than the option of a whole-of-life policy.

The cons of a level term life insurance include:

• The coverage is temporary, if it is not claimed before the term’s end, you do not receive a pay out. If you want an assured payout, whole of life insurance will be more suitable for you.
• Level-term life insurance policies do not take inflation into account. If you have cover of £100,000, this will not hold the same real value in 30 years time. If you’re conscious of inflation, an increasing life policy may be more suitable for you.

What happens if you outlive your term life insurance?

If you don’t pass away during the chosen term of your level term life insurance, your policy will end. If you want to continue having cover, you will need to take out a new policy. Similarly, if you outlive the term of your policy, your dependents won’t receive a pay out when you die. Some insurers may offer to extend your policy’s term, but it’s likely to come with a higher premium.

Can I cancel my level term policy?

You can cancel your policy at any time, however, you will no longer be eligible for any payouts and you will not get back any money you have already paid in.