What is level term life insurance?
Level term life insurance is the most popular type of life insurance in the UK. It provides a fixed cash payout (known as the "sum assured") to your beneficiaries if you pass away during the policy term.
Unlike decreasing term insurance where the payout reduces over time, with level term insurance the amount your family receives stays the same throughout the entire policy. This makes it ideal for covering debts that don't decrease, such as interest-only mortgages, or for providing ongoing financial protection for your family.
Key Features
- Fixed payout: The sum assured stays the same throughout the policy term
- Fixed premiums: Your monthly payments stay the same (unless you choose increasing cover)
- Flexible term: Choose coverage from 5 to 40 years
- No payout at end: If you outlive the term, no payout is made (but your family was protected)
How does level term life insurance work?
Level term life insurance is straightforward:
- Choose your cover: Decide how much cover you need (e.g., �200,000) and for how long (e.g., 25 years)
- Pay monthly premiums: You pay a fixed monthly amount to keep the policy active
- Payout if needed: If you pass away during the term, your family receives the full �200,000
- Policy ends: If you outlive the term, the policy ends with no payout
Example Scenario
Sarah, age 35:
- Takes out �250,000 level term life insurance for 25 years
- Pays �18 per month
- If Sarah passes away at any point in the next 25 years, her family receives �250,000
- If Sarah lives beyond age 60, the policy ends and no payout is made
Who is level term life insurance for?
Level term life insurance is ideal if you:
- Have an interest-only mortgage that doesn't decrease
- Want to provide a fixed lump sum for your family's future
- Need to cover debts, loans, or financial commitments
- Want to leave money for children's education or inheritance
- Have financial dependents who rely on your income
- Run a business and need key person protection
Benefits of level term life insurance
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Guaranteed Payout
Your family receives the full amount no matter when you pass away during the term
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Fixed Premiums
Your monthly cost never increases throughout the policy term
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Simple & Clear
Easy to understand with no hidden conditions or complex terms
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Family Security
Peace of mind that your loved ones are financially protected
Level term vs decreasing term
| Feature |
Level Term |
Decreasing Term |
| Payout amount |
Stays the same |
Decreases over time |
| Monthly cost |
Higher |
Lower |
| Best for |
Interest-only mortgages, family protection |
Repayment mortgages |
| Flexibility |
Fixed protection amount |
Matches reducing debt |
What is a level term life insurance policy?
To get a level term life insurance policy, you apply online or over the phone. You'll provide personal details including age, health status, and lifestyle information. The insurer uses this to calculate your premium.
Once approved, your policy can last up to 40 years. You make regular monthly payments to keep it active. If you pass away during the term, your beneficiaries claim the payout with a death certificate.
Important: If you outlive the policy term, no payout is made and the policy simply ends.
How much level term life insurance do I need?
£137,934
Average UK mortgage debt
£2,548
Average monthly household costs
£34,566
Average personal debt
£3,953
Average funeral cost
What is the best level term life insurance?
The best policy varies for each individual based on your circumstances, age, health, and budget. Compare quotes from multiple insurers to find the best rate.
Compare quotes from 50+ insurers →
How much is level term life insurance?
Premiums start from as little as £5-£10 per month. A healthy 30-year-old non-smoker could get £100,000 of cover for 25 years from around £8-12 per month.
Your premium depends on: age, health, lifestyle (smoking status), cover amount, term length, and medical history.
Can I buy level term life insurance online?
Yes! You can buy entirely online. Compare quotes, select your policy, complete the application form, answer medical questions, and receive an instant decision - completely paperless.
Can I get joint level term life insurance?
Joint life - first death: Pays out when the first person dies, then the policy ends. Usually cheaper than two separate policies.
Joint life - second death: Only pays out after both people have died. Typically used for inheritance tax planning.
Level term life insurance advantages and disadvantages
✓ Advantages
- Affordable monthly premiums
- Fixed payout amount throughout
- Large potential payout (up to £10 million)
- Terminal illness cover included
- Customizable term length (5-40 years)
- Can add critical illness cover
- Can be written in trust for tax efficiency
- Quick and easy to apply online
✗ Disadvantages
- More expensive than decreasing term
- No payout if you outlive the term
- No guaranteed payout
- Must disclose medical history accurately
- Premiums can increase if you add cover later
- No cash value or savings element
- Policy cannot be changed once started
- May become unaffordable
