What is Level Term Life Insurance: A Simplified Explanation

Understanding life insurance is simpler than it may seem, and level term life insurance is equally straightforward.

An image illustration of Level Term Life Insurance
Level Term Life Insurance

Our informative guide delves into the intricacies of this type of insurance, providing a comprehensive comparison with other policies.

Discover more about how level term life insurance can serve as a robust financial support system for your loved ones in the event of your passing.

Exploring Level Term Life Insurance

What is Level Term Life Insurance?

Level term life insurance maintains consistent payments and coverage throughout the policy term, ensuring stability.

This remains unchanged, regardless of when the insured person passes away. Legal & General Life Insurance exemplifies this type of policy.

Notable Features

Limited Protection Term: Lasting 10, 15, 20, or 30 years, unlike whole or universal life insurance, which offers permanent coverage.
Death Benefit: If you pass away during the term, beneficiaries, typically your family, receive a lump-sum, usually income tax-free payout.
Premium Stability: Payments remain unchanged throughout the term.
Expiration: When the term concludes, your life insurance protection ends, necessitating a new policy.

Customizing with Riders

Riders, optional provisions for added protection, enhance a term policy’s flexibility over its up-to-30-year duration. Popular riders include:

Term Conversion Rider: Allows conversion to a permanent policy without a medical exam within a specified period, ensuring continued protection if health deteriorates.
Waiver of Premium Rider: Pays premiums during disability, preserving the policy’s effect. Guardian’s version includes a unique “own-occupation” definition and an enhanced Waiver Plus rider.
Guaranteed Renewability Rider or Clause: Permits policy renewal after the term, albeit at a higher cost, beneficial for those with health challenges near the term’s end.
Charitable Benefit Rider: Exclusive to Guardian, it adds 1% to the death benefit (up to $100,000), directed to the chosen charity, supplementing the amount for designated beneficiaries.

Why Consider Level Term

Level term proves appealing for those prioritizing income replacement, offering predictable payments and substantial benefits over a limited period—an affordable choice for safeguarding your family’s financial well-being.

Is Level Term Life Insurance Right for Me?

Suitable for various circumstances, level term life insurance assures a fixed payout, offering peace of mind.

It serves as a financial lifeline, covering ongoing living costs and providing stability for your family in the event of your passing.

Financial Support: Level term payouts can cover mortgage, educational costs, household bills, and children’s activities, sustaining your family’s lifestyle.

Drawbacks of Level Term Life Insurance

While providing a fixed cash sum payout, the amount doesn’t adjust for inflation, potentially lagging behind rising living costs. Additionally, the policy might contribute to your estate, making it subject to Inheritance Tax.

Inflation Concerns: Payouts may not keep pace with increasing living costs due to the absence of inflation adjustment.

Legal & General Life Insurance

Features Details
Minimum Age 18
Maximum Age 77 (Life Insurance), 67 (with Critical Illness)
Policy Term 1-50 years (Life Insurance), 2-50 years (Critical Illness)
Payment Frequency Monthly
Standard Term Offered 80% of applications


Consider options other than level term life insurance.

If not opting for level term, explore Decreasing Life Insurance, ideal for safeguarding a repayment mortgage.

While maintaining consistent payments, the coverage decreases, aligning with the mortgage reduction.

This ensures your loved ones can retain the family home, minimizing disruption in the event of your passing.


Spread the love