It is an insurance policy that will pay out a lump sum if you die during the term. It is called level term because the payout amount remains the same up until the policy ends.
How does it work?
Level term life insurance gives you a payout if you die during a fixed term, like 40 years.
If you die after the term ends, you will not qualify for a payout, and your monthly premiums are not returned to your family.
How to find the best level term life insurance
Before you start getting quotes online, work out how much cover you want, and for how long. This will make it easier for you to find the policy you want at the cheapest price:
How much of a payout you need: The higher the amount you choose, the more expensive your premiums are likely to be. Only get quotes for cover you need to try and cut the cost of your life insurance.
How long you need cover for: Work out how long you need cover for and choose a length to match, e.g. to run alongside your mortgage term. However, the shorter the term you choose, the more expensive your premiums will be.
How long can a policy last?
There are a few restrictions that could affect the term you choose:
Maximum age you can apply: Depending on the policy, a policy may set a maximum age restriction for when you can apply, e.g. 49 years old.
Maximum age you can have cover until: All policies have age limits, meaning a policy will no longer cover you once you reach a certain age, like 70 years old.
Maximum term a policy can last for: All term life policies have a fixed length of time they run for, like 40 years, and you cannot choose a term that exceed this.