What is Level Term Life Insurance?

Level Term Life Insurance is a category of insurance that pays a tax free lump sum to you or your family if you die whilst the policy is in force. The key point is that on this type of policy, the sum insured remains the same (i.e. level) throughout the time the policy is in force.

Level Term Insurance is used for most family protection situations. However, if you want the insurance cover to rise as time goes by, you will need to add what is called “Index Linking” to your policy. This ensures that your insurance cover rises in line with inflation. Most insurance companies make this adjustment annually in line with the Retail Price Index. This does mean however, that your monthly premium will rise in line with rises in the sum insured. Most good web sites will give you the option of Index Linking your policy.

You can also have Term Insurance with “Decreasing cover”. (For further information about Decreasing cover click here: Decreasing Term insurance)

It is important to note that a Level Term Insurance policy does not have any investment value. If you are looking for a policy which does have an element of investment within it, you want Life Assurance. (For further information about Life Assurance click here: What is the difference between Life Insurance and Life Assurance?)

Important: These notes are only introductory and are not meant to be exhaustive. We hope they have provided you with a little more insight into Level Term Insurance. There are other variations and optional extras available. MoneyQuest will give you further information.

This web site is owned and managed by Alliance Internet Ltd.

Alliance Internet Ltd is an Appointed Representative of Financial Connexions Ltd. Financial Connexions Ltd is authorised and regulated by the Financial Services Authority.