Level term life insurance

Level term life insurance is ideal for protecting your family against large expenses if you were no longer around.

The sum assured holds its value, meaning that regardless of when you pass during the policy term, the pay out sum remains level.

For this reason, level term cover is well suited for covering expenses which do not change significantly over time.

The key difference between level term and decreasing term life insurance is the pay out sum.

With level term life insurance, the pay out holds it’s value. This means, regardless of when you pass away during the term, the amount your loved ones receive is fixed.

Decreasing term life insurance, on the other hand, has a sum assured which reduces throughout the policy term.

Therefore, the further into the policy you pass, the less your loved ones will receive.

As the pay out sum decreases, so does the risk to the insurer, making this form of cover cheaper than level term.

The amount of level term cover you require will depend on what it is you are looking to protect.

When determining the amount of cover required, consider how much your loved ones would need to pay for all the necessary outgoings.

For example, think about daily living expenses, household running costs, mortgage/rental payments and funeral costs.

Your available monthly budget is also likely to affect the amount of coverage you secure.

Your health and wellbeing will be taken into account when calculating your monthly premium.

Therefore, those who are older and/or in poor health may not be able to afford the desired level of cover.

As a result, you may have to reduce the amount of cover you take out.

In order to find the most cost-effective policy, it is best to compare quotes from multiple insurers.

Using an FCA registered broker, such as Reassured, can save you money and also help you make an informed decision.

On average, a joint level term policy will save you approximately 25% compared with two single policies.

A joint level term policy protects two people simultaneously and upon the first death, the surviving party will receive a fixed pay out.

However, once a pay out has been issued, the joint cover expires.

This can leave the surviving partner uncovered and needing to secure new cover when older - which is likely to mean higher premiums.

Equally, it is important to consider what would happen if both parties were to pass away at the same time.

In this instance, only one pay out would be made, which may not be sufficient, especially if you have young children.

When considering whether to take out a joint or single level term policy, it is important to determine the cover you require and if this meets your needs in a worst-case scenario.

Most level term policies allow you to include critical illness cover at an additional monthly cost.

This extra level of protection provides you with a pay out if you are diagnosed with a critical, yet non-terminal illness, covered by your policy.

Typically, this covers a heart attack, stroke and various forms of cancer, amongst other life-changing illnesses.

The added coverage could help pay private medical bills, fund necessary adaptations to your home or simply to enjoy with your loved ones.

Your life insurance needs are likely to evolve over time, as your personal circumstances change.

For example, you may purchase a larger family home and/or decide to have children.

In both of these instances, it is possible to evoke a special events option on your level term policy.

This allows you to increase your level of cover without the need for additional underwriting.

When your circumstances change, it is important to contact your insurer to ensure you have enough coverage in place to meet your needs.

It may also be beneficial to obtain a new set of quotes to determine whether it is more cost-effective to alter your existing policy or take out new cover.

Writing your level term life insurance policy in trust doesn’t have to be difficult.

At Reassured, we are proud to offer all our customers a free trust writing service, (if required).

One of our team will walk you through the application process, answering any questions you may have and putting your mind at ease.