Age-Based & Level Premiums: What’s the difference?

aged based level based life insurance comparison

No two families are the same, which means there’s no one-size-fits-all when it comes to life insurance. But where do you start when trying to figure out what’s right for you and your loved ones? At Smart Insurance we believe that your cover should be personalised to you. That way you can be sure that you’re protecting your family and the life you’ve built, the smart way.

With Smart Family Life Insurance, you have a choice of two cover options: Age-Based (whole of life insurance) or Level (term life insurance) premiums. The basic features are the same - as long as you’re a UK resident and you’re aged 18 to 65, you can apply for cover ranging from £60,000 up to £750,000 depending on your age. But there are some key differences you should know about to help you make a better choice for your family. Let’s explore them:

Age-Based premiums

Level premiums

Whole-of-life insurance

Fixed term life insurance

Monthly premium is recalculated and increases every year

Monthly premium stays the same each year

Benefit amount is recalculated and increases every year

Benefit amount stays the same each year

Typically starts at a lower premium amount than a Level policy


What is an Aged-Based policy?

An Age-Based policy is a type of increasing life insurance. This means that your monthly premium will start at a lower amount than a Level policy and is recalculated every year based on your age and any benefit amount increases. An Age-Based policy is a whole of life policy.

Pros of an Age-Based policy

  • If you choose an Age-Based policy, your Smart Family life Insurance will be in place for the rest of your life - as long as you keep up with payments. This means that you can have peace of mind that whenever it is you pass away, your family will have some much-needed financial support.
  • As your premiums increase, so too will your benefit amount – so you can leave a larger sum of money behind for your family.
  • With an Age-Based policy your monthly premium will start at a lower amount than the Level Smart Family Life Insurance policy. So, if you have a tighter budget initially, an Age-Based policy may be right for you.

Cons of an Age-Based policy

  • Your benefit amount and premiums will only be able to increase for 10 years. Which means once the increases have happened, you will have reached the maximum benefit amount for your cover.

How does an Age-Based policy work?

If you choosean Age-Based Smart Family Life Insurance policy, your chosen benefit amount will automatically increase by 5% each year on your policy anniversary. Your monthly premium will also increase. This will happen for 10 years in a row and you don’t have to do a thing. You’ll be sent a new policy schedule each year, which will show your new monthly premium recalculated based on your age, and the new benefit amount.

So, for example, a benefit amount of £100,000 would increase by 5% to £105,000 after the first policy anniversary, £110,000 after the second policy anniversary, £115,000 after the third policy anniversary, and so on. It would reach a maximum of £150,000 after 10 years.

If you don’t want to accept the benefit and premium increase, you don’t have to. Simply opt out of the automatic benefit amount increases. Your policy will still be an age-based policy, so your premium will continue to increase only in line with your age. If you change your mind down the line, you can still opt back in.

Who would an Age-Based policy be good for? 

An Age-Based policy may be good for families who have a tighter budget initially. At the beginning of an Age-Based Smart Family Life Insurance policy, your monthly premium will start at a lower price than a Level Smart Family Life Insurance policy. This could help you to work up to a higher benefit amount (and premiums) down the line when you can better afford it.

It’s also a good option if you want to know that whenever it is you might pass away, your cover will be in place to help support your family financially. As our Age-Based policy is a whole-of-life insurance policy, you can feel confident that as long as you keep up with your premiums, your cover will stay in place for life.

What is a Level policy?

A Level policy is a type of life insurance that stays the same for the duration of the cover. This means that your chosen benefit amount and your premium will stay the same each year – unless you ask us to make a change. A Level policy is a fixed term policy, which means you can choose a period of time between 10 to 40 years for your cover to be in place.

Pros of a Level policy

  • If you only want life insurance for a particular period of time in your life, you can choose a term that suits you.
  • No surprises: Your monthly premiums (and benefit amount) remain fixed for the duration of your policy, so you know exactly how much you’re paying.

Cons of a Level policy

  • There is no automatic increase with a Level policy which means there’s a possibility that your benefit amount may not keep up with inflation.

How does a Level policy work?

If you choose a Level Smart Family Life Insurance policy, the benefit amount and premium that you agree to at the time of purchase will remain the same for the entire policy. You can of course apply to make changes, but unlike the Age-Based policy this doesn’t happen automatically. You choose a fixed term between 10 and 40 years for your cover to be in place. If you pass away while your cover is in place, your chosen beneficiary will receive your benefit amount. This could help with supporting your kids, paying the mortgage, or it could help to pay off other loans or debts. If your policy term ends and you haven’t passed away, your cover will simply stop.

Who would a Level policy be good for?

Life is unpredictable and things can change quickly, which is why a Level policy may suit families that want to know upfront exactly how much they’re paying, and for how long. If you have a strict budget that you want to stick to, this policy could be for you. If you choose a Level policy, your benefit amount and monthly premiums are fixed from the start. Which means you can work this into your long-term financial plan.

It could be a good option for families that want protection for a specific period of time. For example, while you’re paying off your mortgage you may want cover in place so that if the worst happened to you, your family could continue to live at home. Or maybe you would like to take out a Level policy while your kids are in education to ensure that they can continue as you would like them to if you were no longer around.

What should I look for in my life insurance policy?

No two families are the same, which is why having life insurance that suits your family is so important. When you know what life insurance is and you’re ready to choose your cover, you may want to look for a policy that offers customisation. With a Smart Family Life Insurance policy, you can choose to add optional extras like Children’s Cover or Critical Illness, and you can choose the premium option that works best for your family.

You may also want to keep an eye out for what a policy can offer you now, and not just down the line. If you choose Smart Family Life Insurance, you’ll also get access to a range of free Health and Wellbeing services^ for you, your partner, and any kids up to the age of 21.

Still not sure?

Buying life insurance is probably one of the most important things you’ll do in life and getting it right might seem difficult at times. If you would like to talk about your options and learn more about what type of cover might suit you, you can call our life insurance specialists free on . There’s no obligation to buy cover, we’re simply here to help you work out what’s right for you and your loved ones.

Protect the life you’ve built, the Smart way

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For new Family Life Insurance policy holders only, once a minimum of 6 successful monthly premiums have been paid and the total premiums paid exceed the face value of the gift card. View full terms and conditions. Restrictions apply, see


Please note that the Smart Insurance Health and Wellbeing services do not form part of your life cover contract and it could be changed or removed in the future. This is a non-contractual benefit from Smart Insurance and can be withdrawn at any time.