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If you’re actively looking to take out a life insurance policy, you’ve likely come across various insurance types. There’s a lot to know, and all that information can sometimes feel overwhelming. Since it’s crucial that you select the right policy for you, we’ve put together a helpful guide that will explain everything you need to know about level term life insurance and help you decide whether it’s the right product for you.
Contents
- What is level term life insurance?
- What are the benefits of level term life insurance?
- How much does a level term life insurance policy cost?
- How to get a cheaper level term life insurance premium?
- Do you need a level term life insurance policy?
- Compare Level Term Life Insurance Quotes
- FAQs about Level Term Life Insurance
What is level term life insurance?
There are various types of life insurance policies. In this article, we’re going to focus on level term insurance.
A level term policy comes under the umbrella of term life insurance. A policy that offers coverage within a certain period agreed on between you and your insurance provider. The coverage period is down to you and your needs.
A level term policy comes under the umbrella of term life insurance. A policy that offers coverage within a certain period agreed on between you and your insurance provider. The coverage period is down to you and your needs.
If you need to cover your mortgage, for example, you might choose to set the insurance period to match your mortgage contract. You should compare the different types of term life insurance to find the best policy for you.
A level term policy is different from a whole of life policy, where you get insured until you pass away, regardless of when that happens. Since you’re guaranteed a payout, a whole of life policy tends to be more expensive.
Key Features:
- The payout total in a level term policy remains the same throughout the insurance period. Your premium also remains the same. This is different from a decreasing term policy, where the payout is reduced during the insurance period, but so is your premium. There are situations where a decreasing policy might be better for you.
- In a level term policy, your family and loved ones will only receive a payout if you pass away during the insured period. If the policy runs out, you’ll no longer be covered, and you’ll need to take out a new contract.
- The total period of your level term policy will depend on the company you choose; however, typically, you can select a minimum of one year or a maximum of 50 years.
What are the benefits of level term life insurance?
There are various situations where getting a level term policy is more beneficial than other life insurance policies. Here are some common reasons why you might choose it:
- You have an interest-only mortgage – Since the value of your mortgage won’t change, it’s good to have coverage with a payout that remains the same.
- You’d like to cover inheritance tax – If you leave a large estate to your family and loved ones, they’ll be hit by a large inheritance tax bill. A level term policy can make it easier to cover this cost during what would already be a difficult period.
- To cover funeral costs – According to Dignity Funerals, the average cost of a burial funeral in the UK currently stands at £5,033. If you pass away, will your family have enough funds to cover your funeral?
- To cover living costs – If you pass away prematurely and you’re the primary income earner in your household, your family could land on hard times if you don’t have protection. A level term policy will allow your family to continue with the same standard of living by covering various expenses.
How much does a level term life insurance policy cost?
We compare plans from the leading life insurance providers
The cost of a life insurance policy will depend on various factors. Companies will take into account your age, health, medical history, occupation, lifestyle, and smoking status. They’ll also factor in the policy type, coverage level and total insurance period.
To give you a better idea, here is an example of a level term quote:
- A non-smoking 50-year old applicant looking for £150,000 to cover a mortgage and living costs over 25 years will be paying approximately £30 per month.
Note that this estimate doesn’t take into account critical illness cover, waiver of premium, or other add-ons. Your quote might be more affordable if you’re younger or more expensive if you partake in extreme sports or if you smoke.
As mentioned earlier in this article, your premium is influenced by various factors. If you find that you’re getting expensive quotes, there are some steps you can take to find a better deal. You should:
- Get multiple quotes from different companies. The first quote you get isn’t necessarily the best one. Insurance companies can be flexible, so you can probably find a better deal if you look around or use a price comparison site.
- Make sure you’re only paying for the coverage you need. This is where an insurance calculator is helpful. You don’t want to be paying too much or too little. Discuss your policy in detail with the insurance provider and ask only to include what you need.
- Improve factors that are in your control. You can quit smoking, a habit that has a significant impact on your premium. You can start living a healthier lifestyle, improve your BMI, and participate in less risky sports. Tackling these issues will not only improve your life insurance premium but also likely improve your quality of life.
Do you need a level term life insurance policy?
Whether you need a level term or decreasing term policy is down to your requirements. You should see a level term policy as a safety net for your family and loved ones. If you were to pass away, does your family have the means to continue the same living standards and cover debt payments? This policy is especially worth it if you have a young family and you’re the primary income earner. A level term policy can provide a payout that will see your children’s expenses covered until they’re likely to be financially independent.
A level term policy can also help your family keep your home if there’s still a mortgage to pay. This can help reduce stress at what would be an already difficult time in their lives.
Compare Level Term Life Insurance Quotes
When it comes to protecting your loved ones, it’s important to have the right life insurance policy in place. Level term life insurance is a popular choice among many because it provides a fixed amount of coverage for a set period of time, making it a great option for those who want to provide for their family in the event of their death.
At Life Cover Quotes, we understand that finding the right level term life insurance policy can be a daunting task. That’s why we’ve made it our mission to make the process as easy and stress-free as possible. We connect you with experienced brokers who can provide you with a range of quotes from different insurance providers. This allows you to compare and contrast different policies and choose the one that best suits your needs and budget.
We know that the process of finding the right level term life insurance policy can be overwhelming, so our team is here to help you every step of the way. With our platform, you can be sure that you’re getting the best possible deal on your level term life insurance policy.
Don’t waste any more time searching for the right policy. Contact us today and let us help you find the perfect level term life insurance policy for you and your loved ones.
FAQs about Level Term Life Insurance
Level term life insurance provides a fixed payout amount throughout the policy term, whereas decreasing term life insurance sees the payout amount reduce over time, usually in line with a repayment mortgage. Level term insurance is often more suitable for family protection and income replacement, while decreasing term insurance is ideal for covering a repayment mortgage.
If you outlive the policy term, your level term life insurance coverage will end, and no payout will be made. At this point, you may want to consider purchasing a new policy or converting your existing policy to a whole life or permanent insurance policy, if your provider allows it.
Level term life insurance payouts can be used to replace lost income, pay off a mortgage or other debts, cover funeral costs, and provide financial support to your loved ones in the event of your death.
No, level term life insurance policies do not have a cash value and cannot be cashed out. If you need a policy with cash value, you might want to consider whole life or universal life insurance options.
The cost of a level term life insurance policy depends on several factors, including your age, health, occupation, lifestyle, the coverage amount, and the policy term. To find the best policy for your needs and budget, we recommend using our website, Life Cover Quotes, to compare quotes from various insurers.
Depending on your insurer, you may be able to make changes to your level term life insurance policy, such as increasing or decreasing the coverage amount, extending or shortening the policy term, or adding additional benefits. Always check with your provider for any restrictions or fees associated with making changes to your policy.
Level term life insurance may not be suitable for everyone. It is important to assess your individual needs, financial goals, and circumstances before choosing a life insurance policy. For personalised advice, consider consulting with a financial advisor.
Yes, you can have multiple level term life insurance policies with different insurers or policy terms. This can provide additional financial protection for your loved ones, but always consider the overall cost and whether the combined coverage meets your needs.
To determine the appropriate coverage amount for your level term life insurance policy, consider your financial obligations, such as outstanding debts, mortgage, and future living expenses for your dependents. It’s also important to take into account any existing coverage you may have, such as employer-provided life insurance.
At Life Cover Quotes, we provide a simple and convenient way to compare level term life insurance policies from various insurers in the UK market. By using our website, you can find a policy that meets your needs and budget, without the hassle of contacting multiple providers individually.