Level cover life insurance is the most popular type of cover

If you are looking to put financial protection in place for your family then level cover life insurance is the first place to look. This is the simplest and most common type of life insurance policy.

What is Level Cover Life Insurance?

Level cover life insurance is also known as level cover life assurance. The key word is ‘level’ and this jargon simply means that the lump sum payout that you as the policyholder would receive does not vary over time. So if you choose a lump sum payout of £200,000 for example, that amount does not vary, it is the same if you died after 3 months as it would be if you died after 15 years. Remember though that this is not adjusted for inflation; so £200,000 in 15 years time is not the same value as £200,000 now.

Level cover life insurance is considered by many experts to be the cheapest way to protect your family’s income if the unthinkable did happen and you are not able to provide for them.

Main benefits

The main benefit is knowing that it could pay out a lump sum cash payment to help take care of your family’s future upon your death. The policy is very simple as you know what the cover will pay out, so you can pick an amount that you are happy will support your family financially if the worst did happen.

Main drawbacks

The main drawback is that the insurance does not include extra protection that would be included on more expensive policies such as critical illness cover and income protection. If you were not able to work due to an accident or critical illness this cover would not pay out but you would have similar difficulties to provide for any dependents.

Alternatives

The main alternative is decreasing cover life insurance; which is also known as decreasing term life insurance or mortgage life insurance. The cover works in the same way as level cover but the ‘face value’ (the amount it would pay out) falls over the term of the policy. This makes sense if your main concern is a mortgage you have just taken and you plan on repaying over 25 years. You would simply choose decreasing cover which has the effect of mirroring your outstanding mortgage debt and also lowering the monthly premiums of the life insurance.

There are also other alternatives that are more expensive but offer a lot more protection. For example you could take out life insurance with critical illness cover that would pay out if you were diagnosed with a critical illness or you could take out a real life cover which includes life cover, critical illness cover and also income protection insurance.

Cheaper level cover life insurance

We work with impartial life insurance specialists who will listen to your particular requirements and give advice as well as finding you the best value policy available.

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