Level Term Insurance

The level term insurance option aims to pay a guaranteed cash sum if you die during the plan term or (if you have also taken critical illness cover), are diagnosed as suffering from a terminal illness as defined by the policy provider.

The term of the policy can be from a few years to several decades but it should coincide with your need for protection, very often a mortgage or other financial commitment. The plan would be for a fixed period and level term insurance is often used in conjunction with an interest-only mortgage because they do not reduce over the years.

With a level term policy the benefit is paid on death and remains the same throughout the term. At the end of the term the policy because the policuy has no value it will simply expire. The policy provides pure protection only and there is no cash in value at any time.
Policies may be written on your life or on the life of yourself and your partner.

The premium will be based on your age, gender, amount of cover required and whether you wish to combine crital illness cover with the life cover.

Medical evidence will normally be required by the provider and possibly a medical examination for those in poor health.

Trusts

One important note however is to think ahead and decide what would happen to the money on your death. If you wish the proceeds of your Life Insurance to be paid to your dependents in a straightforward manner then arranging a trust for these funds can be the most sensible thing to do.

In most instances, this should be a Flexible Trust because it allows you and others to control what happens to the money after your death. you decide at the outset who is to benefit and in what proportion. The money is passed directly to your beneficiaries, without reference to your will or the taxman, this means that the whole process of getting the money to your beneficiaries is fast, in fact on average this should take about 6 months. A Trust is also key if you wish to avoid falling into the Inheritance Tax trap.