by 
The Curious Bag
-
If you are choosing among life insurance options, you may be considering level term insurance. Understanding level term insurance will help you decide if this is the right option for you.
Definition
Level term insurance is a life insurance product in which the face value (the amount the policy pays if you die) remains constant throughout the policy.
Purpose
Because level term insurance is only written for a specified period of time, usually between five and 30 years, it can be used to protect your family against having to pay temporary expenses if you die. Temporary expenses can include a mortgage, student tuition or credit card debt.
Investment Potential
Because a level term policy does not build cash value, it is not used as an investment tool.
Cost
Level term insurance is significantly less expensive than a comparable whole life policy. The premiums may increase over time or the insurance company may adjust rates midterm.
Protection
Because the face value remains the same, it provides consistent protection whether you died shortly after purchasing the policy or during the last year of the policy term.
Source:
RELATED QUESTIONS
Copyright 2023, Wired Ivy, LLC