What is level term life insurance?

  • Affordable monthly premiums from 20p-a-day
  • Provide loved ones with a fixed pay out
  • Pay out amount of up to £1,000,000
  • Term length of up to 40 years
Level term life insurance summary

Level term life insurance is a form of life insurance that provides your loved ones with a fixed lump sum pay out (sum assured).

This means that the sum assured maintains its value throughout the policy term. So, regardless of how far into your policy you pass away, your loved ones will receive the same amount.

For this reason, level term life insurance is ideal for protecting large expenses for your loved ones.

You’ll be covered for a specified period of time (often up to a maximum of 40 years) and a pay out will be issued if you pass away during this time.

However, if the end of the term is reached before your passing, the cover expires and no pay out will be received.

Why not compare level term life insurance quotes using an FCA-regulated broker service like Reassured?

Our award-winning, fee-free service can help you compare quotes from top UK insurers, as well as smaller specialists.

The best part is level term life insurance through Reassured starts from 20p-a-day.

Watch our short video on level term life insurance cover:

How does level term life insurance work?

A level term life insurance policy works by proving cover for a set period of time, often this is up to a maximum term of 40 years.

The sum assured will remain the same throughout the policy term. This is different to decreasing term life insurance where the sum assured reduces over time.

If you pass away during the policy term, loved ones can make a claim and a pay out will be issued.

This can help them to cover:

  • Mortgage or rental payments - Average mortgage debt in the UK stands at £137,934[1]
  • Day-to-day family living costs - In the UK households spend £2,548 a month on average[2]
  • Outstanding debts in your name - Average total debt per UK household stands £60,935[3]
  • The cost of your funeral - Average cost of a basic funeral is now £4,056[4]
  • Provide an inheritance - To spend as they wish

Please note, if you outlive the policy term, cover will simply expire and no pay out will be issued.

If you require further information, why not read our comprehensive how does life insurance work UK guide? »

Level term or decreasing term life insurance?

When taking out term life insurance you’ll typically have two options:

  1. Level term life insurance
  2. Decreasing term life insurance

While both policies provide cover for a specified period of time and will only pay out if you pass away during the policy term, there are some key differences to be aware of.

But, what’s the difference between level term and decreasing term life insurance?...

Level term life insurance policy

Level term life insurance

  • Provides cover for a specified period of time
  • Sum assured remains fixed throughout the policy lifetime
  • Ideal for covering large expenses, such as an interest-only mortgage, future family living costs or an inheritance
  • Can be taken out through Reassured from 20p-a-day
Decreasing term insurance policy

Decreasing term life insurance

  • Provides cover for a specified period of time
  • Sum assured reduces over the policy lifetime
  • Ideal for covering a repayment mortgage or debts that decrease over time as your sum assured can reduce in line with payments
  • Can be taken out through Reassured from 20p-a-day ¥

Ultimately, the best policy for you will depend on your personal circumstances. Why not speak to an expert who can provide you with all the information you need

Reassured can help you to conduct a full level term vs decreasing term life insurance comparison, allowing you to find your ideal policy.


We’ve used our award-winning broker service to compare the average life insurance cost of a level and decreasing term policy for a non-smoker, wanting £100,000 cover, over a 20-year term:

AgeLevel termDecreasing term% Difference
30£5.04£4.88-3%
35£5.95£4.99-16%
40£8.16£6.09-25%
45£14.83£8.17-45%
50£21.29£11.51-46%

How much level term life insurance do I need?

How much level term life insurance you need will depend on what you want to protect.

When determining how much life insurance you need, you’ll need to consider how much your loved ones will need to cover all essential expenses when you’re no longer around.

For example: family living costs + remaining mortgage balance + funeral costs + inheritance = sum assured.

By adding these expenses together, you can establish how much life insurance cover you’re likely to require.

Alternatively, you can use the handy level term life insurance calculator below.

To find the most cost-effective level term life insurance policy, that meets all your needs, compare quotes through Reassured.

How much level term life insurance do you need?

Enter your financial commitments below to calculate how much level term life insurance cover you need.

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£121,687 is the estimated average outstanding mortgage per household in the UK.

Our property is generally the largest financial commitment any of us will make.

Your life insurance should cover this significant debt should you no longer be around.

£
?

According to Money Advice Service, full-time childcare in the UK now costs £242 a week.

The loss of a parent could result in the need for additional childcare whilst the surviving parent increases their hours to account for lost income.

Your life insurance cover should factor in this additional required outgoing.

£
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The average level of debt (minus a mortgage) in the UK is £15,385.

Factoring in any outstanding debts in your name when arranging life insurance ensures this burden is not passed to loved ones.

£
?

You may wish to leave your loved ones an inheritance or lump sum gift upon your passing.

Factoring in the gift amount when arranging your cover will ensure the pay out amount will be sufficient to provide your loved ones with this selfless gesture.

£
?

According to SunLife, the average cost of a UK funeral is now £4,417, whilst the total cost of dying is £9,493.

This is a 130% increase over the past 16 years and shows no signs of slowing down.

A significant cost which should be factored into the amount of life insurance you secure.

£
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If you are one of the 65% of the UK who are lucky enough to have savings, this could be used as protection if you were to pass away.

Any pay outs from existing life insurance policies and investments can also be used as financial protection for your loved ones if you were no longer around.

Factor this into your required cover amount.

£ -

Your total cover estimate

£ 0

Let us find your best quotes.

Best level term life insurance

The best level term life insurance for you will be the policy that meets your needs and is at a price within your budget.

Policy terms and conditions can vary significantly between providers due to the different underwriting processes used.

For this reason, it’s essential to compare quotes from multiple providers to ensure you’re getting the right policy at the best available price.

Reassured can help you to compare level term cover from some of the UK’s best life insurance providers, why not get in touch for your free quotes?

How much is level term life insurance?

Level term life insurance can be taken out through Reassured from just 20p-a-day.

However, the exact cost of level term life insurance will depend on your personal circumstances.

When applying for level term life insurance, insurers will take key information into consideration when calculating your monthly life insurance premium.

Information required during the level term application process includes:

As the sum assured remains fixed throughout the policy term, premiums tend to be more expensive than with decreasing term life insurance (where your risk to the insurer reduces).

However, it’s still possible to secure affordable level term life insurance.


Level term life insurance rates:

Below are some level term life insurance rates. Quotes are based on a non-smoker, who’s in good health, for £100,000 of cover:

Age20-year level term life insurance30-year level term life insurance
20£3.55£3.66
25£4.31£4.59
30£4.34£5.56
35£7.77£7.43
40£7.97£10.71
45£11.43£16.49
50£16.89£27.29


Find your cheapest quote using our award-winning life insurance broker service.

Level term life insurance with critical illness cover

It’s possible to add critical illness cover to a level term life insurance policy.

Level term life insurance with critical illness cover allows you to make an early claim if you’re diagnosed with a serious illness.

There’s typically a list of 30 illnesses covered within critical illness cover, including heart attack, stroke and some forms of cancer.

However, this can be more or less comprehensive, depending on the insurer.

The funds from critical illness cover can be used to replace lost income if you’re unable to work. Therefore, you can continue your current lifestyle and/or pay for private medical treatment.

It’s possible to secure critical illness cover as a standalone policy through some providers.

Compare level term life insurance with critical illness cover through Reassured. Quotes start from £10-a-month º .

Joint level term life insurance

It’s possible to take out level term life insurance on a joint basis. This means that two lives will be covered simultaneously under one policy.

There will only be one application where you provide details about both partners and you’ll only need to pay one premium between you.

However, there will only be one pay out, which typically happens after the first death.

Once the pay out has been issued, the policy will expire and the remaining partner will need to secure new cover.

If it’s within your budget, it can be beneficial to secure two single policies to provide two separate pay outs - offering a more comprehensive solution.


The table below shows the price comparison between a joint life insurance policy and two single policies.

Quotes are based on a 20-year level term life insurance policy for non-smokers, in good health, for £100,000 of cover:

AgeOne joint level term policyTwo single level term policies
20£5.45£7.10
25£6.00£8.62
30£6.69£8.68
35£8.14£15.54
40£10.40£15.94
45£13.35£22.86
50£17.82£33.78


Talk to a friendly member of our team to conduct a full joint vs two single policies comparison.

Level term life insurance no medical

It’s possible to take out level term life insurance without having to undergo a medical exam.

Only in rare instances will you be asked to take a full medical examination when applying for life insurance (for example, if you have a severe medical condition).

However, you'll always need to provide medical information during the application process.

This is so insurers can assess your level of risk and calculate your life insurance premiums accordingly.

If you’ve struggled to secure standard life insurance due to poor health, and you fit into the 50 - 85 age bracket, you could secure an over 50s plan where no medical information is required and acceptance is guaranteed.

Level term life insurance for seniors

When taking out level term life insurance, there is typically an upper age limit at which cover will cease.

For this reason, it can be more beneficial for seniors to take out a form of life assurance (such as an over 50s plan or whole of life insurance) to guarantee loved ones a pay out.

Due to your age, and potentially less favourable health, the premiums you pay for term-based cover in your senior years could be costly and a pay out isn’t guaranteed so you could outlive the policy term.

We can help you to find the best senior life insurance to meet your needs. Over 50s plans through Reassured start from just £5 a month + .

Level term life insurance advantages and disadvantages

When taking out life insurance, it’s important to weigh up the pros and cons of each policy type to ensure you’re taking out cover that meets your needs.

Level term life insurance is likely to be most beneficial for young adults with young families to protect large expenses, such as the family home and living costs.

In contrast it may not be the most cost-effective option for those later on in life, with pre-existing medical conditions and/or other high-risk factors, as premiums could be inflated due to the increased risk.

AdvantagesDisadvantages
Has the possibility for a large pay out sumA pay out isn’t guaranteed
Can be used to protect large expenses such as a mortgage, family living costs, outstanding debts and rising funeral costsPay out sum won’t increase with inflation so it may not keep up with rising living costs
Includes terminal illness cover which will allow you to make an early claim on your policy if you fall terminally ill and are given less than 12 months to liveIt can be possible to outlive the policy term
Can be taken out as a single or a joint policyOnce a terminal illness claim has been made, cover will cease
Premiums can be affordable, starting from 20p-a-dayYou’ll need to disclose medical information during the application process, so this form of cover could become expensive if high risk factors are identified


Why not speak to a friendly member of our team who can provide you with all the information you need to make a fully informed decision.

What is level term assurance?

Level term cover is a form of life insurance, rather than life assurance, because a pay out is not guaranteed.

Life insurance pays out if you pass away during the term, whereas life assurance guarantees a pay out when you pass away.

Whole of life insurance is a form of life assurance as cover lasts for life and a pay out is guaranteed to be issued upon your passing.

You’ll be required to pay premiums for the remainder of your life to keep cover valid. If taking out this form of cover at a young age you could pay more into the policy than it will pay out.

For this reason, level term life insurance can be a more cost-effective option for young adults and whole of life can be better suited to those later in life.

Can level term life insurance cover a mortgage?

Yes, a level term life insurance policy can be used to protect a mortgage.

Level term mortgage life insurance simply refers to a level term life insurance policy which is taken out to protect a mortgage.

The large pay out potential means it’s ideal for covering an interest only mortgage, which would allow your loved ones to remain in the family home after your passing.

In contrast, if you have a repayment mortgage, a level term life insurance pay out could be used to cover your mortgage balance and provide loved ones with an inheritance (depending on your remaining balance).

In this instance, as your mortgage balance decreases, more of the pay out could be used as an inheritance by your loved ones to spend as they wish.

If you only need cover to protect a repayment mortgage, a decreasing term life insurance policy may be more suitable.

Contact a member of our team about the best way to protect your mortgage.

What happens if you outlive your level term life insurance policy?

If you outlive the term of your level term life insurance policy the cover will expire and no pay out will be issued.

Term life insurance provides cover for a specified period of time. While this can be up to a maximum of 40 years, it’s possible to outlive your policy.

If you pass away after your policy has expired, no pay out will be made, and you’ll need to secure new cover.

Writing your level term life insurance policy in trust

The process of writing your level term life insurance policy in trust brings several important benefits:

  • Avoid or minimise 40% inheritance tax (so loved ones receive a full pay out)
  • Avoid a lengthy probate process (so loved ones receive a faster pay out)
  • Have more control over the pay out (who gets what and when)

Upon you passing, by default, your life insurance policy will form part of your estate (any property, possessions and money in your name).

40% inheritance tax is charged to loved ones if your estate exceeds the £325,000 threshold, which would reduce the amount your loved ones receive.

Writing your life insurance in trust is a process that can detach the value of your policy from your estate, which can avoid/minimise 40% inheritance tax for loved ones.

This process will also pass the funds of your life insurance policy into care of a trustee (of your choosing) after your passing who will ensure they are paid are per your wishes.

Reassured are proud to offer free trust writing service (if required and if offered by the insurer), where we can walk you through the process and answer any questions you may have.

Compare level term life insurance quotes to find your best deal

The cost of level term life insurance can vary significantly between providers so it’s always best to compare quotes.

At Reassured we can help you to compare quotes from some of the UK's major providers, as well as smaller specialist insurers.

This way we can find you the best available deal on a policy that meets all your needs.

Our quotes are personalised, without obligation and fee-free.

The best part is level term life insurance quotes through Reassured start from just 20p-a-day.

Why not get in touch?

Sources:

[1] https://moneynerd.co.uk/average-mortgage-debt/

[2] https://www.nimblefins.co.uk/average-uk-household-budget

[3] https://www.uk-debtservice.co.uk/news/uk-debt-statistics-2021/

[4] https://www.sunlife.co.uk/siteassets/documents/cost-of-dying/cost-of-dying-report.pdf/

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