Level Term Life Insurance is a cheap way to get life insurance in the UK, and it is also a fairly simple way to cover your life.
Level Term Life Insurance is often used for family protection purposes by providing life insurance cover in the event of the death of the life or lives assured for the benefit of the surviving spouse and, if there are any, the dependant children to make their lives more comfortable financially.
The amount of life cover is often decided after getting advice from a financial adviser. The adviser will look at a family's needs, taking into account things like the amount of income needed and how long the family needs life cover, i.e. as long as the children are still dependent on their parents.
Level Term Life Insurance has a set amount that stays the same for a certain amount of time, like 25 years. It is usually set up on a "sole life" or "joint life, first death" basis, and the premium often stays the same throughout the term.
If the person or people who are insured live longer than the policy's term, the Level Term Life Insurance policy usually ends and doesn't pay out anything. This is one reason why Level Term Life Insurance is usually cheaper than, say, a Whole of Life policy. A Whole of Life policy will always pay out when the life assured dies, as long as the life assured has kept paying the premiums.
Level Term Life Insurance is also used to cover personal and business liabilities, like overdrafts and some types of mortgages and loans, so that if the life assured dies, the liability is paid off and the survivor doesn't have to make the loan or mortgage payments.
Critical illness coverage can sometimes be added to a Level Term Life Insurance policy. If one of the insured is diagnosed with a certain critical illness, the policy will pay out.
If this kind of coverage was added, the premium would be higher than if only life insurance was covered.
