The insurance industry is slightly notorious for its tendency to use complex terms to describe things that are, in fact, relatively straightforward. One such example is ‘level term life insurance’ – which in reality is nothing like as complex as it sounds.

Life and death

The old saying that “there is nothing certain in life apart from death and taxes” has a ring of truth to it – unfortunately!

It’s never a happy thought but the fact of the matter is that we’re going to die. For some of us, that event may happen at a younger age than we’d wish and may cause our loved ones not only the grief of our passing but serious financial troubles if debts and other such commitments are left behind and unresolved.

Life insurance is one method of trying to ensure that our families have some form of financial protection in place should we no longer be there to help.

Options for life insurance

As people and families are different, they typically have varying needs for life insurance and the insurance companies try to recognise this fact by offering different forms of policies.

One such policy is called level term life insurance. This is a form of policy that you pay for (typically) each month through a premium. Should you die, the policy will pay out to your family a fixed specified lump sum to help them cope.

The chief characteristic of level term life insurance is that both the cost and potential benefit is fixed for the term of the policy and they never vary – hence it is known as ‘term insurance’.

Critical illness and mortgage life cover

Having a lump sum paid out following your death may prove a financial lifeline for those you leave behind but it may be only part of the story.

It is also possible to take out a form of life insurance directly linked to your mortgage so that it would be paid off following your death. Another option would be to take out what’s called ‘critical illness cover’ that would pay you and your family benefit in the event you were diagnosed with a critical illness.

These forms of protection may complement your base level term life insurance.

Terms and conditions

All insurance of any form will have its own conditions that need to be complied with. In the case of level term life cover these are typically simple and easy to understand through it may well be advisable to check the conditions carefully to ensure that the policy meets your needs.You may find:

• a medical may be required depending upon your circumstances, such as if you have an existing serious medical condition;
• some policies may exclude suicide from their cover (or suicide for a specified period after inception);
• in some cases there may be some upper-level age restrictions at inception;
• if you do have an existing serious medical condition, you may find that your premiums are higher or that the condition is excluded from those causes of death considered grounds for a claim or perhaps you cannot obtain cover at all.

Peace of mind

No insurance can prevent the tragedy of an untimely death but having a level term life insurance policy in place could mean that you and your family can relax a little more and enjoy life free from such worries about their financial future.