What is Level Term Assurance?

  • The life cover is paid if you die within a set ‘term’.
  • The amount of life cover remains the same (level) throughout the term.
  • Level term assurance thus guarantees a known lump sum payout upon death within a fixed time.

Is it worth having?

  • Level term is important protection for those who have a spouse, a partner and/or children who would suffer financial loss on the death of the life assured.
  • Cover may also be needed for a non-working spouse or partner, especially when children are young, as if the spouse or partner died, the main earner may need to stop working.
  • It is useful protection and, if set up correctly, should not be too expensive.
  • We can research the market and find the most appropriate and cost effective policy for you.

How much does it cost?

  • The higher the cover the more it costs.
  • The amount of cover should take into account any outstanding debts and allow your dependents to maintain a reasonable standard of living.
  • Check whether your employer provides a ‘death in service’ benefit as this may provide a certain amount of cover already. If it does, deduct the amount it pays out from the total cover you need.
  • Your lifestyle can make the cost of cover cheaper. The amount paid increases with the likelihood of death within the term – age, health, being a smoker and having a risky occupation are all factors which affect the level of premium.
  • For those who have stopped smoking for more than 1 year, it is worth us obtaining a quote as we may be able to obtain a substantially reduced premium.
  • Couples can have joint or separate cover.

Single vs Joint Policies

  • Couples can choose either separate policies, or joint policies which pay out on the first death.
  • A joint policy would only be suitable if you needed the policy to pay out on the first person to die, as the cover would end at that point.
  • Unmarried couples taking a life policy should normally choose single policies, especially if no wills are in place.
  • Even if a joint policy does look suitable, it’s worth getting quotes for stand alone policies anyway, as it may be cheaper.

Consider Writing in Trust

  • If you die, the life assurance payment will form part of your estate, which means that the value of your estate could be liable to Inheritance Tax.
  • In many cases you can avoid this by writing the policy in trust – which can mean that payment(s) goes direct to your dependents, avoiding inheritance tax.
  • Payments into trust are normally made quicker as the Insurance company only need sight of the death certificate. There is no need to await the granting of probate.
  • Writing a policy in trust is relatively easy as most policies include the option (and papers) for this option at no extra charge.


These plans have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
As IFA’s we can research the market to provide you with the most suitable product available.
The Financial Conduct Authority does not regulate Inheritance Tax Planning and Trusts.

Kate Beale

For more information on level term assurance contact Kate Beale on:

Tel: 01206 871120
Email: kate@bgafs.co.uk

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