Term life insurance is a type of life protection and there are different types for different needs. For instance, if your main concern is how your partner would be able to keep the mortgage repayments up to date in the event of your death, you may wish to take decreasing term cover (otherwise known as mortgage protection life cover). However, if you wish to provide your loved ones with financial security overall should you die, then you may want to look at taking out level term insurance.

Does standard level term insurance also cover my mortgage?
Level term life insurance may cover your mortgage if you build in your outstanding mortgage balance when choosing your sum insured. However, it is not specifically tailored to meet your outstanding mortgage as decreasing term is. If you want to ensure your loved ones have the money to clear the mortgage in the event of your death, and you want them to have general financial security as well this may be a suitable choice.

However, do note that it may work out to be a costly way of taking out insurance with your mortgage in mind, as you may have paid the balance off well before your death. If you have considered your mortgage and have added on say £75,000 to cover your mortgage, it may not be needed. In this respect, decreasing term cover may work out to be the better policy.

So what is the difference between level term and decreasing?
With decreasing term life insurance, you take out the policy to cover the remaining years on your mortgage. You also insure your life for the amount that is left outstanding on your mortgage. As you pay off your mortgage, the amount left owning decreases and so does the amount your loved ones get back from the policy, in the event of your death during this time.

How do I know how much insurance to take when taking level term?
If you wish to take out level term insurance to ensure that you are able to leave your family financially secure for a period after your death, then different factors need to be considered. Here are some of the things you may wish to consider:

• the amount of debt and financial commitments you have;
• whether you have children – if so, are they going to need childcare, medical and dental care, school expenses and college or university costs?
• the rate of inflation;
• if your partner has to take full time work when your income is lost.

You may wish to sit down and work out your annual income and then multiply this by so many times, bearing the above in mind, to help you to reach a figure as to how much life cover to take out.

Are there any ways to save on insurance?
There are ways you may be able to help yourself to keep down the cost of the premiums for your term insurance. If you stop or cut down on the amount you smoke or drink, you may be able to reduce your premiums. You may also be able to save money if you ensure that you have a healthy lifestyle and good diet and are the correct weight for your height. Finally, using a broker who searches the market place for you may also help you access some suitable, affordable, deals.

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