When people are looking to purchase term life insurance, they can opt for a level term life policy. This insurance plan provides a consistent premium payment amount throughout the life of the policy while being a cost-effective choice.

Benefits

A person can buy a level term policy with a huge benefit amount and pay less in premiums than permanent policies such as whole life and universal life. Policy owners may also get a return of their premiums if they complete the insurer's requirements.

Compared to Other Term Life Insurance

Level term insurance plans are more cost-effective than other term life policies. Although premiums for level term policies are initially higher, the costs will average out less than other term plans as their prices escalate later.

Renewability

A level term insurance plan can be renewed if the policy contains a guaranteed renewability provision. The renewal clause allows the insured to be covered under a new policy without evidence of insurability.

Term Conversion

Policy owners of level term life insurance can convert their policy into permanent life insurance. During the conversion period, the policy will upgrade without any medical re-examinations of the insured if the benefit amount remains the same.

Warning

When converting a level term policy, the prices may increase significantly due to age and features of a permanent life plan such as the cash value and investment options. A $250,000 level term policy can cost $350 a year while a permanent policy with the same benefit amount will cost $3,000 annually, according to MetLife.

Source:

Term or Whole Life?

Term Life Insurance

Level Term Insurance

More Information:

Prudential