In short
Level term insurance pays a fixed lump sum if you die during the policy term, with the sum assured staying the same throughout.
A level term policy fixes the cover amount at the start and keeps it the same for the whole term. If you die during the term and the claim is valid, it pays the agreed sum assured. If you outlive the term, there is no payout and the cover simply ends.
Because the sum assured does not fall, level term cover suits needs that stay roughly constant, such as family protection, replacing income, or an interest-only mortgage where the capital owed does not reduce.
Level term cover is usually more expensive than decreasing term for the same starting amount, because the insurer remains on risk for the full sum throughout. Premiums are typically fixed for the term, although adding indexation will increase both the cover and the premium each year.
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