Level life insurance

Level life insurance cover provides constant payout in case of a successful claim after the death of the person. Usually the premiums are fixed and depend on the various factors such as age of the person, the duration of the contract and the amount of life cover an individual wants to be protected with. Because of a fixed payout ratio this kind of insurance is used to protect interest only loans and provide family with stable income in case of the death of the breadwinner. As the result the duration of the level life insurance contract coincides with the adulthood or the expected date of the termination of the mortgage. As in the case of critical illness insurance a person can select from fixed and reviewable types of premiums with the latter being cheaper.

Level life insurance policies can be written in a single life or joint life basis. A policy on a single life basis is more expensive but is more recommended for family who have small children because a joint policy will only pay once whereas a single life policy will pay twice and the final amount paid will be larger.

Most level life insurance plans have a terminal illness written into them. This means that the plan will pay a cover in the case of terminal diagnosis. A terminal diagnosis means that a person is not expected to live longer than 12 month. However it is important to bear in mind that various life insurance providers treat terminal illnesses differently. Some of them require that the terminal illness be diagnosed no later than 18 months until the termination of the insurance contract whereas other state that only 12 until termination is enough. In any case it is important to read carefully what the insurance contract states.