What Is Level Term Life?

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People who are looking for a cost-effective way to pay for life insurance can purchase a level term life policy. This plan provides a consistent payment amount with the option to convert or renew their policy without medical or financial requalification.

Level Term Life Insurance

  • Level term life insurance provides a fixed premium payment amount for the duration of the policy. A term life insurance plan can last for 5, 10, 20 or even 30 years.

Benefits

  • Level term policies are inexpensive to purchase compared to permanent life insurance. For example, a 40-year-old male, non-smoker can get a $250,000 level term 20 policy from a major insurance company for approximately $350 a year, while a permanent policy with the same benefit amount would cost around $3000 in annual premiums.

Term Conversion

  • Level term life policies can be converted into permanent life insurance. As long as the benefit amount remains unchanged and the transition takes place during the conversion period, the insured can upgrade without evidence of insurability or a financial re-examination.

Renewals

  • A policy owner can renew a level term life policy for additional years once their policy expires without a medical examination. The premium amount may increase due to age.

Warning

  • Term life policies, including level term, does not build cash value like permanent life insurance plans, such as whole life and permanent life. Once a level term policy expires, the coverage will be terminated unless it is renewed.

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