Level Term Assurance is life cover that stays level throughout the term of the policy, and is usually geared for the same term of your mortgage to coincide with the final payment date.

This type of cover is best suited to interest only mortgages, or those wanting to have a surplus sum once a capital repayment mortgage is paid off. The diagram below illustrates that as the term of the mortgage continues, the cover remains in place at a consistent level.

Level term assurance can also be used to cover capital repayment mortgages, even though it is predominantly used with interest only mortgages. In the instance of capital repayment mortgages, it is useful for providing dependants with surplus cash once the mortgage has been paid off.

Level Term Assurance is slightly more expensive than decreasing term assurance, but offers a higher guaranteed sum assured throughout the term of the policy.

It would be unwise to insure an interest only mortgage with decreasing term assurance, as the levels of cover would fall significantly leaving you massively underinsured.

Another life assurance option on an interest only mortgage could be to look at a savings product with combined life cover, such as an endowment policy or pension plan, however it is not within the scope of this website to advise on investments. For advice on repayment vehicles for an interest only mortgage you could try our associated company PM Independent Financial Services on 01282 866190 or http://www.stableinvestment.co.uk and speak to one of their Investment Specialists.