Level Term Life Insurance UK

Anyone with family or friends who are financially dependant on them should consider taking out a level term life insurance policy. If the worst happens then a cash lump sum will be paid out to provide for your loved ones. The peace of mind that level term life insurance offers the policy holder, and the financial aid it provides your family in their hour of need, seems a worthwhile investment for as little as £10 per month.

Level term life insurance is the most commonly taken out type of life cover in the UK ; it's also the easiest to understand. The ‘level' bit refers to the fact that policy payments remain the same each month (regardless of fluctuations in interest rates) and that a fixed capital payout is guaranteed in the event of the policy holder passing away.

The ‘term' bit marks the fact that the policy has a fixed lifespan, whereupon it expires. It's important to understand that if the policy expires (say at age 65) and the policyholder is fit and well – then there is no financial payout. Similarly, unlike other insurance policies, level term life insurance can not be cashed in (as it has no actual cash value). As the term is fixed, the length of the policy may not be extended at a later date.

The cost of monthly premiums largely depends on three factors: which supplier you choose (and here it really does pay to shop around) which type of policy you opt for (level of cover) and what length of term you decide on (as a rule of thumb premiums rise with the length of the policy). Other factors are often also taken into account, such a medical history and whether or not you are a smoker.

A number of people are first introduced to level term life insurance when they apply for an interest only mortgage. In fact, banks and building societies stipulate that anyone applying for an interest only mortgage must have life insurance cover to pay off the loan balance should they pass on.

 

 

 

 

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