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Level Term Insurance

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Level term insurance is a type of term life insurance policy that pays a pre-determined death benefit with a face value that remains the same throughout the term of the level term insurance policy. For example, a 10-year, $250,000 level term insurance policy would pay $250,000 upon the policyholder's death anytime during the 10-year term. Level term insurance shouldn't be confused with level premium term life insurance (also called guaranteed rate), which refers to a policy with premiums that remain the same throughout the policy term. Some level term insurance policies are level premium (guaranteed rate); others are not. Some level term insurance policies allow for automatic renewal (without health screening) at the end of the level term insurance policy; others do not. A level term insurance policy may or may not be convertible (meaning that it could be exchanged for a different kind of policy such as whole life). Other types of term life insurance (in addition to level term insurance) include increasing term (not common) and decreasing term (common for covering mortgages and other large debts).



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