Benefits

Level-term life insurance can present a large death benefit with an affordable price tag. This is because all term policies (including level term) provide only "pure" insurance, with no added investment value.

Conversion

A level-term life insurance plan can be converted into a permanent life insurance policy. If the upgrade is done during the conversion period, the insured will not have to undergo a medical examination.

Renewability

If the level-term life policy includes a guaranteed renewability provision, then once the term is about to expire, the policy owner can renew the coverage without providing evidence of insurability. However, due to the insured's age, the premium amount may increase.

Compared to Other Term Life Policies

Other term policies have initial premiums cheaper than level term. Over a period of time, those premiums will become more expensive and the average costs of insurance for a level-term policy will be more affordable.

Warning

When upgrading to a permanent life insurance plan, term life policyholders may find the premium increase to be very expensive. A 40-year-old, non-smoking male who can get a level 20-year term policy for $350 a year can pay as much as $3,000 annually for a permanent policy with the same benefit amount.

Source:

SmartMoney.com: Term or Whole Life?

TheFreeDictionary.com: Level Term Insurance

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