Level Term Life Insurance

Level Term Life Insurance (or Level Term Life Assurance) lasts for a fixed
period of time, for instance 5, 10, 15, 20 or 25 years. Payouts only occur
should you die during the term of the policy.

Level Term Life Insurance is a popular insurance which normally has a
fixed premium and payout –  the policy will not adjust in value to allow
for inflation or any other economic factors.

The length of the term is determined at the start of the policy. If you don’t
die during the policy it terminates and you will need to start a new life
insurance policy if you still require life insurance.

Life insurance provides for your children, partner and relatives who may rely
upon your income to pay for the mortgage and other expenses, in the event of
your death.


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Why Choose Term Life Insurance?


Term life insurance is often taken out at the same time as a mortgage to provide assurance that the mortgage will be paid in the event of your death. Knowing that your dependants will not have to make monthly mortgage payments or default on the mortgage offers peace of mind. 
The length of the term is often 25 years to match the term of the mortgage - as you may only require cover for you’re the mortgage on your home.

Payment of Debts

Term life insurance is also used by many to guarantee that outstanding debts will be paid in the event of their death. For example, a car loan, renovation loan, etc.

Leaving a Lump Sum

It is common for someone to take out a term life insurance policy to ensure that the family will receive a sum of money in the event of their death. This may be to cover the schooling/university tuition fees of their children, or to ensure enough finance is in place to cover day-to-day expenses. It could also help to cover any funeral expenses and other associated costs.

Note: It is important to take out a policy that covers your needs and the needs of your family, as the higher the coverage, the higher the premiums you will have to pay.



Decreasing Life Insurance

Decreasing life insurance provides an alternative to level term insurance.

If you require a fixed amount of cover for a specific period, term life insurance is the obvious choice. However, if you want cover for a debt which will reduce over time, decreasing life insurance may be the best option.

The amount of premiums you pay into a decreasing life insurance policy will be less than a level term insurance policy as the payout amount decreases over time.


Family Income Benefit

Family income benefit policies pay out a monthly income which can be more cost-effective.


Choosing the Right Policy

Carefully consider the type of insurance policy that is appropriate for your needs, and evaluate a variety of policies to find the right one for you. Different providers offer different premiums and different pay out terms, so it is in your best interests to compare.

Assess Your Existing Policy

It is important to often re-evaluate and assess your existing life insurance policy to ensure it still meets your requirements. An alteration in your financial position could dramatically affect the amount of cover you would like to take out. Buying a larger property, having more debts, or a growing family, would all give you reason to want more financial protection.

You should never cancel a current policy before activating a new policy to take its place, as such an action will leave your dependants without protection.

Furthermore, the cost of policies increases with age, so it may be more economical to add to your existing policy, as opposed to cancelling any cover you currently have.   










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