Level term life insurance

Compare level term life insurance quotes from just £26**

Buy life insurance and choose a £75 gift card with Confused.com Rewards*

**Based on Confused.com data June - August 2023. Prices based on monthly payments for average quote offered on a policy with 24 years terms and £224,178 of cover.

What is level term life insurance?

Level term life insurance pays out a lump sum to your loved ones if you die when the policy is active – or as insurers describe it, during the term of the policy.

It pays out the same amount no matter when you die, whether this is in year 5 or year 30 of your policy. This is why it's known as 'level term'.

This makes it different to decreasing term life insurance, where the amount you get as a payout decreases over time.

How level term life insurance works

  • You choose your cover term: This is how long your policy runs for. Most policies run between 5 and 40 years.
  • You choose your cover amount: This is how much you'd like your policy to pay out if you die.
  • You name your beneficiaries: These are the people who will get your payout.
  • You pay your premiums: This can usually either be done monthly or annually.
  • Your policy pays out if you die: This needs to be in a way that's covered by your policy during your cover term.

If you outlive the term of your policy, your cover ends and you normally don’t get back what you’ve paid. Life insurance is designed to work as a safety net. Your payments guarantee that if you were to die during the policy term, your family would be supported and can use the payout however they see fit.

Level term cover is also available as a joint policy. Here you cover 2 people on one easy-to-manage policy. Joint life insurance policies tend to be cheaper than taking out 2 separate life insurance policies, so they’re a useful option for couples.

The difference here is that the policy ends with the death of one of the policyholders, so if you both need cover, separate policies might be more convenient.

Buy life insurance and choose a £75 gift card with Rewards*

*Get reward after 6 months of your policy being active. Excludes over 50s guaranteed acceptance policies and can’t be used alongside cashback offers. T&Cs apply. **Restrictions apply, see https://www.amazon.co.uk/gc-legal

£75 Gift Card*
£75 gift card
£75 gift card

What our life insurance expert says

"If you’re looking for a policy that pays out exactly how much you want, whether you die in year 1 or year 21, then level term cover could be right for you.''

''Just make sure you review your policy regularly – annually or after a big life event such as a new addition to the family. This helps your loved ones have the cover they need."

Matthew Harwood, Home & lifestyle insurance expert at Confused.com
Home & lifestyle insurance expert Confused.com logo

Alternatives to level term insurance

When you’re comparing life insurance with us, there are other options besides level term.

Decreasing term life insurance policies pay out less the further into your term you get. People often cover mortgages with this type of policy, as the payout decreases over time in line with the policyholder’s outstanding mortgage debt.

If you took £100,000 of cover and died in year 5 of your term, your loved ones might get £95,000 as a payout. If you died in year 25, they might get £10,000. Decreasing term life insurance tends to be cheaper than level term life insurance because the eventual payout is likely to get smaller over time.

If you only want to cover your mortgage, decreasing term life insurance may be for you. But if you want to cover a bit more and have a fixed lump sum, consider level term life insurance.

Some insurers also offer a type of policy that pays out a set amount monthly if you die. This type of policy is called family income benefit. Another option is whole life insurance. Unlike level term life insurance which covers for a fixed time, a whole life policy covers you until you die. We don't currently offer whole of life insurance, but you can find this through other providers.

We compare trusted life insurance companies to find you our best deals

Legal & General logo
Zurich logo
Vitality logo
Aviva car insurance logo

How much is level term life insurance?

Level term life insurance costs around £26 per month**.

This is just an average, and the exact price you pay for your policy depends on a few things like:

  • The amount of cover you get: A larger payout typically means your monthly payments will be higher. 
  • The length of your cover period: The longer the policy, the more it’s likely to cost. 
  • Your age: The older you are, the more your cover is likely to cost. 
  • Your health and medical history: While most level term life insurance policies cover pre-existing conditions, you may have to pay more. It’s worth checking the policy wording on pre-existing conditions – which can be anything from asthma to heart disease – before you buy.
  • Your lifestyle: This includes things like your weight, activity levels, if you smoke and how much you drink.
  • If you choose to add critical illness cover: This policy add-on pays out if you suffer a severe injury or become seriously unwell during your cover term. It helps ensure that your family is financially secure no matter what life throws at you, but it comes at an additional cost.

On the whole, the younger and healthier you are when you take out life insurance, the cheaper your monthly payments are.

**Based on Confused.com data June - August 2023. Prices based on monthly payments for average quote offered on a policy with 24 years and £224,178 of cover.

How much level term life insurance do I need?

Most people take out enough life insurance to allow their loved ones to carry on living comfortably if they were to die.

But settling on the right amount can be tricky. While you don’t want too little cover, you also don’t want to take out too much, which could see you paying more than you need to in premiums.

You need to consider:

  • Your mortgage: You'll probably want your life insurance to clear this debt if you die during the term. Otherwise, your partner could lose the house if they can’t afford the mortgage payments alone.
  • Your essential living costs: Think about bills, food, and general living expenses, and how much your family would need to support themselves without your income.
  • Inheritance: Do you want your level term life insurance payout to act as inheritance?
  • Debts: Any outstanding debts may be deducted from the value of your estate when you die.
  • Funeral costs: Funerals sometimes cost thousands, a life insurance policy could help towards this expense. The average cost of a basic funeral is around £3,953, according to a report by Sunlife.

Help with calculating your cover

How can I get a level term life insurance quote?

Getting a quote for level term life insurance is easy, and only takes a few minutes. We just need a few details from you like:

  • Your name and age
  • How much cover you want
  • How long you want your cover to last
  • An outline of your medical history
  • Whether you smoke
  • Whether you have any pre-existing conditions

Wondering why we ask all this? Find out in our guide on how life insurance premiums are calculated.

When we have that information, we’ll compare quotes from the panel of insurers we work with to find you the cover you want at our best price.

Is level term life insurance taxable?

The payout from your level term policy is only taxable if it pushes the total value of your estate to more than £325,000. There are a few exceptions to the rule.

Generally, your beneficiaries don't pay inheritance tax if:

  • If you leave your estate to your spouse, civil partner or a charity
  • If your estate amounts to less than £325,000, even after your payout

If it’s under £325,000 you pay no tax. You can find out more on inheritance tax on Gov.co.uk.

If you’re worried your life insurance payout may push your estate far above the £325,000 cut off, think about writing your life insurance in trust.

Doing this means your payout is kept separate to your estate and you don’t pay tax on it. This ensures your loved ones get your whole payout, rather than just part of it.

Level term life insurance

Why choose Confused.com?

  • We're FCA regulated. This means that we follow their strict operational guidelines to do things right for you. So when you use our site, you know you’re in safe hands.
  • We have a robust security and privacy policy in place and promise to look after your personal details with the utmost care.
  • We’re 100% independent and not owned by an insurance company. We’ll always show you our best prices that are available at the time, no matter who they’re from.
  • Our experts and consumer champions are dedicated to helping our customers find the best deal for their needs and budget.

Compare level term life insurance quotes

Life insurance guides

See all life insurance guides

What are the different types of life insurance?

Page last reviewed: 09 October 2023

Reviewed by: Matthew Harwood

Confused Life is provided by Direct Life & Pension Services Ltd, who are authorised and regulated by the Financial Conduct Authority. Registered office; 2nd Floor Gateway 2, Holgate Park Drive, York, United Kingdom, YO26 4GB. Registered in England and Wales No 2467691. Our service is free and compares a wide range of trusted household names. Confused.com is an intermediary and receives commission from Direct Life & Pension Services Ltd which is based on a percentage of the total annual premium if you decide to buy through our website. We pride ourselves on impartiality and independence – therefore we don’t promote any one insurance provider over another.