What is level term insurance?

Level term life insurance is a policy that pays out a lump sum if you die within its agreed duration. It's called level term life insurance because the amount you're covered for remains the same throughout – whether you purchased a five-year term or a 30-year one.

Frequently asked questions

Because term life insurance is not something that can be redeemed for cash, it cannot decrease in value. Term life insurance has just one purpose; customer payments protect against the possibility that they will die during the policy's term. Should the worst happen, their chosen beneficiaries will receive a lump sum.

Term life insurance can be bought for different durations. As long as you keep up your regular payments, a 20-year term policy will ensure that you are covered for 20 years, a 30-year term policy will cover you for 30 years and so on. This means that should you die within the time period you selected in your policy, your loved ones will receive a death benefit payout.

The decision of whether you should take out level term or decreasing life insurance should be based on your personal circumstances. Decreasing life insurance is often bought with a particular debt in mind, such as a mortgage. As you gradually pay off the amount you owe, the life insurance decreases in parallel. Level term life insurance functions a bit differently. Your beneficiaries will receive the same fixed lump sum no matter when you die, so long as it's within the duration of your policy.

Many life insurance policies are level term, which means the level of cover stays the same over the term. But there are other types, such as decreasing term life insurance. It offers cover that decreases over time, so can be used to cover debts that also decrease (such as repayment mortgages). Because the cover reduces, premiums tend to be lower than with level term insurance.

It is possible to get life insurance if you have type 1 or type 2 diabetes. However, you must be able to demonstrate that your condition is being managed and under control. Premiums may be higher so it's worth shopping around or speaking to a financial advisor about the best options.

Because term life insurance is not something that can be redeemed for cash, it cannot decrease in value. Term life insurance has just one purpose; customer payments protect against the possibility that they will die during the policy's term. Should the worst happen, their chosen beneficiaries will receive a lump sum.

Term life insurance can be bought for different durations. As long as you keep up your regular payments, a 20-year term policy will ensure that you are covered for 20 years, a 30-year term policy will cover you for 30 years and so on. This means that should you die within the time period you selected in your policy, your loved ones will receive a death benefit payout.

The decision of whether you should take out level term or decreasing life insurance should be based on your personal circumstances. Decreasing life insurance is often bought with a particular debt in mind, such as a mortgage. As you gradually pay off the amount you owe, the life insurance decreases in parallel. Level term life insurance functions a bit differently. Your beneficiaries will receive the same fixed lump sum no matter when you die, so long as it's within the duration of your policy.

Many life insurance policies are level term, which means the level of cover stays the same over the term. But there are other types, such as decreasing term life insurance. It offers cover that decreases over time, so can be used to cover debts that also decrease (such as repayment mortgages). Because the cover reduces, premiums tend to be lower than with level term insurance.

It is possible to get life insurance if you have type 1 or type 2 diabetes. However, you must be able to demonstrate that your condition is being managed and under control. Premiums may be higher so it's worth shopping around or speaking to a financial advisor about the best options.