Get a Quote
0800 246 5191 Get a Quote

Level Term Life Insurance

A fixed lump sum cash pay out for loved ones

  • Provide loved ones with a fixed lump sum pay out
  • Pay out (sum assured) up to £1,000,000
  • Affordable premiums from 20p a day†
Compare Level Term Life Insurance Quotes »
Life insurance protection

We work with some of the UK's leading insurers

Aviva
Legal & General
LV=
SCOTTISH
WIDOWS
Vitality
Zurich

Level term life insurance

Level term life insurance is a form of life insurance that provides your loved ones with a fixed lump sum pay out if you pass away during the policy term.

Unlike decreasing term life insurance, the pay out sum maintains its value throughout the policy term.

So, regardless of how far into the policy you pass away, your loved ones will always receive the same amount.

For this reason, level term life insurance is ideal for helping to protect large expenses for your loved ones.

If you don't pass away during the set term, cover will expire and no pay out will be made to your loved ones.

Our award-winning and fee-free service can help you compare level term quotes from top UK insurers. Quotes start from just 20p-a-day.

Compare Level Term Life Insurance »

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?

  1. Choose your cover: Decide how much cover you need (e.g., £200,000) and for how long (e.g., 25 years)
  2. Pay monthly premiums: You pay a fixed monthly amount to keep the policy active
  3. Payout if needed: If you pass away during the term, your family receives the full £200,000
  4. 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?

  • 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

💷

Guaranteed Payout

Your family receives the full amount no matter when you pass away during the term

📊

Fixed Premiums

Your monthly cost never increases throughout the policy term

✓

Simple & Clear

Easy to understand with no hidden conditions or complex terms

🛡️

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

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

Simple Formula: Family living costs + Remaining mortgage + Funeral costs = Sum assured

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

Frequently Asked Questions

How much does level term life insurance cost?

The cost depends on your age, health, lifestyle, the amount of cover you need, and the length of the term. A healthy 30-year-old non-smoker could get £100,000 of cover for 25 years from around £8-12 per month. The best way to find the cheapest rate is to compare quotes from multiple insurers.

Can I increase my level term cover later?

You can't typically increase the cover amount on an existing policy, but you can take out an additional policy if your needs change. Some insurers offer "guaranteed insurability options" that let you increase cover without medical underwriting at specific life events (like having a child).

What happens if I stop paying premiums?

If you miss payments, your insurer will usually give you a grace period (typically 30 days) to catch up. If you don't pay within this time, your policy will lapse and your cover will end. You won't get any money back from premiums you've already paid.

Is the payout tax-free?

The payout from a life insurance policy is usually tax-free if it's written in trust. Without a trust, the payout may be subject to inheritance tax if it takes your estate over the threshold (currently £325,000). We recommend writing your policy in trust - it's free and takes just a few minutes.

Can I get level term insurance if I have health conditions?

Yes, but it depends on the condition. Minor health issues may result in slightly higher premiums, while serious conditions might make it harder to get cover. Be honest on your application - non-disclosure could invalidate a future claim. Our advisors can help find insurers who specialise in covering specific health conditions.

What's the difference between level term and whole of life?

Level term lasts for a fixed period (e.g., 25 years) and pays out only if you die during that time. Whole of life insurance covers you for your entire life and is guaranteed to pay out eventually. Whole of life is significantly more expensive but builds cash value over time.

Get Your Free Quote

Answer a few simple questions to get your instant quote

33% Step 1 of 3
Free & no obligation
Instant quote in 60 seconds
Compare UK's best providers

Protect Your Family Today

Get instant quotes from 50+ insurers and find the perfect level term policy for your needs

Get Free Quote Call 0800 246 5191

Free, no obligation quotes • FCA regulated advisors • 100% impartial