Deciding to make large purchases, such as a home, can be an extremely nerve racking process. It’s impossible to determine what’s around life’s next corner.
Level term life insurance can help people to feel more secure about the commitment involved in huge financial undertakings.
Level Term Life Insurance
This type of life insurance policy provides a lump sum payout if the insured person dies during the coverage period. The premium amounts and payout remain “level” over time. This policy is best suited for people looking for insurance coverage for a debt that will not change over time such as an interest only mortgage. An interest only mortgage has borrowers pay only interest and taxes each month leaving the initial mortgage amount still remaining at the end of the term. Level term life insurance only covers a specific time period – such as how long the loan repayment terms are. Any claims can only be made within that time period covered.
Level Term Life Insurance vs. Decreasing Term Life Insurance
Both level term life insurance and decreasing term life insurance are often referred to as mortgage life insurance plans. Level term life insurance specifies that premiums and the lump sum payout remain the same over time. Decreasing term life insurance specifies that both premium and lump sum payout amounts decrease over time. This is because the amount of the mortgage goes down over time. The type of mortgage or loan that an insured individual has will determine which type of life insurance policy will suit an individual’s specific needs.
Critical Illness Coverage
Critical illness coverage can often be added to a level term life insurance policy. This type of coverage will provide a payout in the event the insured individual is diagnosed with a critical illness covered by the policy. Critical illness cover usually covers a specific list of illnesses including multiple sclerosis, stroke and heart attack. It is important that anyone buying an insurance policy fully understand the terms and conditions of the policy. A cost vs. benefits analysis should be done to determine whether this additional coverage would be beneficial.
Many insurance companies offer joint coverage for couples looking for level term life insurance. There are two different payout options for joint mortgage life insurance that those being insured can choose from – first death and second death policies. First death policies pay off the mortgage after the death of one spouse so that the surviving partner has no mortgage left on the property.
Alternatively, a second death policy pays off the mortgage only after the death of the second spouse. The choice for joint coverage and between the two different types can make a big difference to when it comes to the cost of premiums.
Benefits of Level Term Life Insurance
Level term life insurance can be set up to pay out the outstanding debt payments such as mortgage or loan payments directly to the lender. This means that the surviving family will not have to worry about how to make loan payments. It also insures that the lender will have their debt paid off regardless of any extraneous circumstances.
Level term life insurance can also be set up to provide a direct lump sum payout to family in case of death. It can give a feeling of financial security to the entire family to know that there is a plan in place for the worst case scenarios. Many lenders also require a life insurance policy to be in place before any loans are given out.
Level Term Life Insurance Costs
The costs associated with level term life insurance cover vary widely from person to person and from policy to policy. However, like any other type of insurance product, there are a number of factors that go into determining an individual’s cost for coverage including:
• Amount of coverage purchased – how large the lump sum payment is in case of death of insured
• Age of the person insured – older people will pay higher premiums
• Medical history – a family history of disease may increase premium amounts
• Gender – men generally have shorter life spans than women and higher premiums
• Occupation – some occupations are deemed to be “more risky” than others such as police officers
• Hobbies and interests – some hobbies are also deemed to be “more risky” such as rock climbing
• Smoking status – people must be smoke free for at least 1 year to be deemed a non-smoker
• General health – this may include results of a medical exam depending on the insurance company
• Medical records
Generally speaking, the more risky a person is determined to be, the higher their insurance policy premiums will be. Some individuals may be deemed too risky to provide coverage to at all.
Some may be tempted to not answer all of the insurance company’s questions truthfully in hopes of having lower premium payments or to qualify for insurance. However, not fully disclosing any pertinent details can make the policy null and void. That means that the insured individual and the beneficiaries of the policy will not qualify for any benefits whatsoever. This would make any premium payments into the policy completely worthless. It is absolutely crucial to practice full disclosure with any forms, surveys or questions asked by an insurance company. Holding back information is fraudulent and makes the entire insurance policy invalid.
Level Term Life Insurance Quotes
Getting quotes from a number of the top insurance companies in the UK is now both easy and convenient. Fill out our online form today to get started. Our expert employees are standing by to provide a range of quotes for the coverage desired with the best prices and policies. Our service has no cost and no obligation to purchase whatsoever.
Death is inevitable for all of us. Unfortunately, it is also very unpredictable. Level term life insurance can help to ensure that family members will be provided for in case tragedy strikes. This type of insurance can help families to keep their homes and feel more secure in the purchase of a home.