Unfortunately, life is not predictable. While we may all like to think that we’ll live into our 70s, 80s or even longer, the sad reality is that many people die at younger ages – sometimes leaving families, dependents and financial burdens behind them. That’s where level term life insurance cover may offer valuable protection.

What is life insurance?

There are various forms of cover available. Some may be linked to paying off your mortgage if you died leaving that in debt. Others may offer combined forms of investments, savings and life insurance.

The objective of all forms of life insurance is though broadly similar. It exists to give the policyholder and their immediate family (or beneficiaries) the comfort of knowing that should the worst happen, at least some provision has been made to deal with the commitments and perhaps debts left behind.

What is level term life insurance cover?

One form of life insurance is perhaps the most familiar. That involves making standard premium payments over time and in return, if you die your family will receive a specified lump-sum payment. That may be invaluable to them depending upon your personal financial circumstances.

Over time, neither the payment nor the potential benefits will increase or reduce. This is why this is called a ‘level term’ and the overall product referred to as level term life insurance cover.

Policies of this type can typically offer cover for you and your partner/spouse and they will pay out when the first of the jointly insured dies.

Are there additional benefits?

Broadly speaking, no. This form of policy is not an investment or a savings plan.

You do not get any money back if you are fortunate enough to live to a very old age. It does not cover you for things such as critical illness, accidents that leave you disabled or unemployment through redundancy etc.

Who uses this type of cover?

Many different people in various financial situations consider this type of cover to be useful. This may be particularly so for those who have just finished paying-off their mortgage or who have financially independent children.

What is the difference between this insurance and mortgage protection life cover?

Mortgage life insurance (sometimes called decreasing term life insurance) is typically linked to the concept of paying off your mortgage should you die while a debt still remains outstanding. As your capital debt decreases over time with many standard types of mortgage, the insurance policy would need to pay out less and less in the event of your death as time went on.

This means that often mortgage protection insurance may be a little cheaper than level term life insurance cover.

What about critical illness cover insurance?

Critical illness can strike us at any time and may rob us of our income due to being unable to work. Critical illness cover can be taken out to protect against this risk and it can run alongside a level term life insurance cover policy. The two may complement each other to offer you increased peace of mind in total.

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