Compare Level Term Life Insurance

  • A level term insurance policy can provide financial peace of mind for loved ones
  • Certainty of fixed monthly premiums and a set payout if you die during the policy term
  • Compare tailored level term life insurance quotes from trusted providers
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Just answer seven questions to help you decide the type of life insurance and cover amount you need.
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Once you've found the right policy, you can apply online with the insurer.

What our Nerds say about level term life insurance

Level term life insurance is designed to help ease the financial pressures your loved ones might face should the worst happen to you. The lump sum payment that level term life cover delivers to those left behind if you die during the policy term can be used however they wish. Whether the money helps to pay off the mortgage or to cover day-to-day bills, these policies can give peace of mind that your family should be able to remain in their home and live comfortably.

A level term life insurance policy is one of the simplest types of life cover you can get. The ‘level term’ means the payout remains the same should you die in the first year of the policy or the last.

If you’re here to compare level term life insurance policies, you can get a tailored quote straight away. There are a few questions to answer, but these have been broken down into manageable chunks, and everything is explained as you go. The process is delivered in partnership with life insurance broker LifeSearch to help you find the best level term life insurance to meet your needs.

What is level term life insurance?

Level term life insurance, also known as level term assurance, is a type of life insurance cover where the amount paid out if you die is the same throughout the term of the policy. This means your beneficiaries will receive the same lump sum payout regardless of whether you die within the first year of the period your life policy covers or the last.

In the same way your cover remains ‘level’, the premiums you’ll pay for level term life insurance you can get online through our partnership with LifeSearch are guaranteed and therefore fixed for the duration of your policy too. Reviewable premiums, where the amount you pay is usually lower in comparison at the start but has the potential to rise when reviewed, are also sometimes available through LifeSearch, but you’d need to talk to one of its advisers.

How does level term life insurance work?

When applying for level term life insurance, you’ll need to decide the length of time your policy will last – this is the policy term – and how much you want the value of the payout to be if you die during that term. Available policy terms will vary between life insurance providers but it might be possible to arrange cover for anywhere between one and 70 years.

The longer the term and the older you are when taking the policy out, the higher you can usually expect your monthly premium to be. Your health and family history of certain medical conditions, and lifestyle factors, including whether you smoke, will also be important in determining the level term life insurance rates and premiums you must pay. Premiums are usually payable each month throughout the policy term.

The policy will only pay out if you die within the policy term, with your beneficiaries receiving the amount that was agreed at the beginning and as specified in the policy. This will be a one-off lump sum payment.

Some life insurance policies also include a terminal illness benefit option, which will trigger early payment of the lump sum if you’re diagnosed as terminally ill during the policy term and have an expected life expectancy of usually less than 12 months.

Be aware that life insurance policies usually have certain exclusions, meaning they’re unlikely to pay out if you pass away because of a health condition you did not disclose to the insurer when setting up the policy, or as a result of alcohol or drug misuse. Missing monthly payments can also invalidate your policy and could leave you without cover in place.

If the term of your policy ends before you die, you won’t pay any further premiums, but your beneficiaries won’t receive a payout from the policy when you do pass away. There is no payout or cash value to yourself for outliving the policy either. If you still need life cover going forward, you’ll need to apply for a new policy.

Does level term life insurance account for inflation?

Because any payout from a level term life insurance policy will always be the same for the duration of the policy, this type of cover does not take inflation into account. So if your policy is for a sum of £100,000, and the prices of goods and services rise over the years, this amount will be worth less in real terms the further into the future you go.

If you’re concerned about the potential effect of inflation, you might want to consider an increasing term policy, where the payout amount rises the further into the policy term you get. Unfortunately, we are not able to offer this product as part of our comparison, but it's important to know its a product that's available.

Level term or decreasing life insurance? How do they compare?

Both level term and decreasing term life insurance cover are designed to pay a sum to your beneficiaries should you die during the policy term. However, whereas the payout amount remains the same for the duration of a level term life insurance policy, with decreasing term cover the payout gradually reduces over time.

Because of how it works, decreasing term insurance is often used to cover a repayment mortgage or other debt where the amount owed should decrease over time. Level term life cover would be a more suitable option to cover an interest-only mortgage.

Due to the payout steadily reducing, decreasing term insurance is usually cheaper than level term insurance.

» COMPARE: Decreasing life insurance quotes

Pros and cons of level life insurance

There are definite advantages of level term life insurance to certain people, but also some potential drawbacks to be aware of too.

Benefits of level term life insurance

  • If you choose guaranteed premiums which are fixed for the policy term, you’ll know what you will be paying monthly.
  • You know exactly how much any payout will be.
  • You’ll have the comfort of knowing your loved ones have a financial safety net should the worst happen to you.

Drawbacks of level term life insurance

  • It can be more expensive than decreasing term cover.
  • The older you are when applying, the higher your premiums are likely to be.
  • The real value of the payout amount can diminish due to inflation.
  • There is no payout if you don’t die within the policy term.

How much does level term life insurance cost?

The monthly premium you’re asked to pay for level term life insurance will take into account a number of factors, including:

  • the payout amount you want to set
  • the length of the policy term
  • whether the policy covers one person or is set up on a joint life basis
  • your age
  • your health and your family medical history
  • lifestyle factors, including whether you smoke, and your alcohol intake
  • your job
  • whether you include optional extras such as critical illness cover.

Generally, level term life insurance premiums will be higher the older you are when you apply, the longer you want your cover to last and the larger the payout you require. Having certain health conditions yourself or running in your family, and being a smoker or a heavy drinker, are all likely to lead to higher premiums as well.

» COMPARE: Level term life insurance quotes

How much cover do I need?

How much level term life insurance cover you need can be difficult to figure out. As a starting point, think about how your loved ones might support themselves financially in your absence. Could they afford the mortgage repayments without your income or do you need enough cover to pay the mortgage off entirely? What other debts and outgoings need covering each month and how much money might your family need to live comfortably? Will circumstances allow them to work if you’re not there? And do you have other life cover that might pay out, perhaps in the form of death in service benefit through your work?

From a different perspective, it’s important to think about how much you can afford to pay in the way of monthly premiums.

If you are unsure of how much cover you require and want tailored advice from an expert simply leave a contact number and a LifeSearch adviser will call you back to discuss your individual requirements.

How can I compare level term life insurance?

You can compare level term life insurance quotes tailored to your circumstances through our partnership with LifeSearch. The step-by-step approach you’ll take breaks the quote process down into manageable chunks to ensure the premiums you see at the end align closely with your wants and needs.

There is plenty of handy guidance along the way as well, to help if you’re not sure of anything that is being asked or you can talk to an adviser at LifeSearch.

» COMPARE: Level term life insurance quotes

Level Term Life Insurance FAQs

What happens if I live longer than my level term policy?

Should you outlive your level term life insurance, the policy will lapse and you’ll no longer pay your monthly premiums. Importantly, you’ll no longer be covered either as the policy won’t pay out if you die once your policy term has ended. At this point, it’s therefore important to think about whether you need to arrange new cover to protect your loved ones.

What happens at the end of my level term policy?

If you reach the end of your level term policy, the cover lapses and your beneficiaries won’t receive a payout under the policy if you subsequently die. The monthly premiums required for this particular policy will stop, but you should consider carefully whether you might need new cover in place to safeguard your family financially.

Is level term different to whole life insurance?

Whole of life policies are so called because they provide cover over your whole life, ensuring that your loved ones will receive a payout whenever you die. Level term insurance policies, on the other hand, only run for a set term. If you die once this has expired, there will be no payout.

» MORE: Whole of life insurance explained

Can I get level term life insurance without a medical exam?

Level term life insurance can usually be arranged without a medical exam, particularly if your age, health and lifestyle suggest you don’t pose a significant risk to the insurer. However, ultimately it depends on your individual circumstances.

The likelihood of being asked to undertake a medical examination tends to rise if you’re older, have a particular pre-existing medical condition, are in relatively poor health or overweight, or if you smoke or drink more than the recommended alcohol limits. With your permission, insurers will often seek the answers they need from your GP before requesting an examination.

What are level term life insurance rates?

Level term insurance rates is just another name for the premiums you’re charged for your cover. These are usually paid monthly throughout the term of your policy.

Can I cancel my level term insurance?

You can cancel a level term life insurance policy at any time, but you will no longer have any protection under that policy when you die. Cancelling will mean you stop paying your monthly premiums, but you might need to pay an administration charge for ending your policy early. Providers do not usually refund any of your premiums when you cancel your level term insurance policy.

The exception is if your policy has only just started, when you should have a minimum 30-day, cooling-off period during which you can cancel the policy and receive a refund of any premiums you have already paid. The provider might still make a deduction to cover the period when the policy was in force and charge an administration fee.

Before making any decision to cancel your level term insurance, check the terms and conditions of your policy and make sure that you are fully aware of the implications. If necessary, discuss your options with your insurer or a financial adviser.

About the author

Tim draws on 20 years’ experience at Moneyfacts, Virgin Money and Future to pen articles that always put consumers’ interests first. He has particular expertise in mortgages, pensions and savings. Read more

This life insurance comparison and quote service is presented via our partnership with LifeSearch Limited. The information you provide is used to generate quotes from LifeSearch. Nerdwallet Ltd does not form part of the service beyond presenting quotes.

LifeSearch Limited is registered at Wentworth House 440 Parkway, Solent Business Park, Whitely, Hampshire PO15 7FJ and is an Appointed Representative of LifeSearch Partners Limited and regulated under the Financial Conduct Authority ref: 402349.

LifeSearch Limited is not part of Nerdwallet Ltd or other Nerdwallet entities.

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