What is Level Term Life Insurance

Level term life insurance is one of quite a few term policies that offers a level death benefit (payout), hence the name! :-)

So what the heck does that mean? I thought you would ask that!

Term life insurance can be classified into 3 basic categories when you are looking at how the death benefit changes.

Types of Term Life Insurance

So when you look at this, the three types of term are level (which we’ll talk about here), decreasing and increasing. This refers to what the death benefit actually does. It will either remain the same (in the case of level), goes up with Increasing or goes down with Decreasing.

The most common type of term life purchased is level term life insurance. Level term has many features and benefits.

So can you guess what one of those benefits are? I’ll give you a hint….we’ve been talking about it here!

Yes…. you’re death benefit remains level throughout the term of your policy, not to mention that level term is very affordable! Especially when you compare it to permanent, read more about Term vs Permanent Life Insurance here, to see which one is right for you!

Term life is more commonly available anywhere from a 5-30 year term.

Example of Life Insurance Level Term

Let’s say your friend Mrs. Garcia is 30 years old and purchased a level term policy for 20 years with a death benefit of $200,000. This means that whether she dies 1 year later or 15 years later, her death benefit will remain the same (level).

Since she purchased a 20 year policy she is also “locked in” with her premium for that time period, in this case it’s 20 years.

This can be very beneficial to her. For instance, if she had only purchased a 10 year policy and still wanted to renew it after the 10 years, her premium would go up.

Why is that? She would have a higher premium because it is based on her new age at the time of renewal!

Now if you’re looking for something more short term, you may want to read about annual renewable term life insurance which is more of a short term policy.

Please keep in mind that all term policies will eventually expire. They are inexpensive because many people outlive their policies, unlike Permanent life insurance, which is what I like to call “buying for the long haul.”

Return to What is Term Life Insurance

Leave Level Term Life Insurance to
Free Life Insurance Quote Homepage