What does “Level Term” insurance mean?

Level Term Insurance pays out a tax-free lump sum if you were to die. The important point is that the sum insured remains the same (i.e. level) no matter when the policyholder died whilst the policy is in force. It is in fact the normal and most popular for of life insurance.

Incidentally, “Level Term Insurance” is just another name for “Level Life Insurance”. There are no differences between them.

Level Term Insurance is the most commonly used insurance for family protection situations. If you want the insurance cover that rises to offset the effects of inflation, you need to add “Index Linking” to your policy. This ensures that the policy’s sum insured rises in line with inflation. If you select Index Linking the insurance company will adjust your sum insured inline with the Retail Price Index (or something similar). This means that your monthly premium will rise in line with the sum insured.

Term Insurance is also available with “Decreasing cover”. (For further information about Decreasing cover click here: What does “Decreasing Term” insurance mean?)

Please note that at no stage does a Level Term Insurance policy have any investment value. If you are looking for an insurance policy that includes an element of investment within it, you want Life Assurance. (Click here for further information about Life Assurance: What is the difference between Life Assurance and Life Insurance?)

These notes are only introductory and are not designed to be exhaustive. We hope they have proved useful.
Life Assurance