Level Term Insurance

Level Term Insurance is the standard form of term insurance. It pays out if you die during the 'term' that you agree on with the insurance provider. The term is the set period of time that the policy covers, usually between one and thirty years. The sum assured, that is, the money that your survivors receive in the event of your death, is guaranteed and it remains unchanged throughout the agreed term.

The premiums that you pay may also remain unchanged. If the amount that you pay each month for your insurance is guaranteed for the duration of the term, this amount may seem proportionately more expensive than other insurance policies at first because the insurer will factor increasing prices over the years into the initial monthly cost. This is a legitimate way of spreading the cost of the premiums: usually they will increase as you age. However, the overall cost of both types of insurance policy will generally work out to be the same.

The longer the 'term', or period of time that the policy covers, the higher the cost of the monthly premium.