Feb 12, 2018
The Financial Conduct Authority does not regulate taxation and trust advice.
The name says it all. It’s term assurance, as you only get a payout within the set 'term' e.g. 18 years. It’s level, because the payout you get is fixed from the start of the term until the end. Level term assurance thus is designed to pay a known lump sum payout upon death within a fixed time e.g. £150,000 if you die within the next 18 years.
The cover and ensuing cost depends on three things.
As noted, couples can choose either separate policies or joint policies which pay out on the first death. However usually 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. Even if a joint policy does look suitable, it’s worth getting quotes for standalone policies anyway, which may be cheaper.
If you die the life assurance payment will form part of your estate, which increases the value of your estate. If the policy is written in trust, the proceeds goes direct to your dependents, avoiding inheritance tax. This is relatively easy to do as most insurance policies include the option (and papers) for writing in trust directly, at no extra charge.
These types of plan will 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.
| Beginner's Guide to Protecting your Future | What is Level Term Assurance? | What Is Mortgage Life Assurance? | Payment Protection Insurance / Short Term Income Protection Insurance | What is Income Protection Insurance? | What is Critical Illness Cover? | What Is Whole of Life Assurance? |