Level Term Life
Level term life insurance is just another form of term life insurance. Similarly, it lasts for a specific period of time and then expires.
The policy’s premiums are guaranteed to remain level, and do not increase throughout the term. Level term life insurance is cheap and simple to understand.
How it Works
Level term life insurance policies are sold in a variety of terms, mostly including 10, 20, and 30 year options.
You must pay premiums either annually or monthly to keep the policy active.
If you pass away during the insurance term, the death benefit is paid out to all of your beneficiaries.
Here are some quick features of level term life insurance to be aware of:
✓ Lasts between 1-30 years
✓ Includes guaranteed death benefits
✓ No guaranteed cash value
✓ Premiums are guaranteed to remain level
Since level term life insurance is basic in form, it usually offers the most affordable rates compared to other life insurance policies. In addition, insurers offer discounts to annually paid premiums rather than monthly.
Here are some average costs:
$ 100, 000
$ 250, 000
$ 500, 000
$ 1, 000, 000
In short, riders are modifications that policyholders can make in order to tailor their policy to satisfy needs.
Riders are either offered by the insurance carrier for free or for an additional cost.
Some popular level term life insurance riders are:
Accelerated Death Benefit Rider
Policyholder gets early access to death benefit to pay for medical expenses due to a terminal illness.
Term Conversion Rider
Term life insurance policy is converted to a permanent life insurance policy.
Remains in effect after the end of the term.
Long-Term Care Rider
Similar to accelerated death benefit rider. Policyholder is granted early access
to death benefit in order to pay for long-term nursing care.
Waiver of Premium
If policyholder become temporarily disabled, premiums are waived until the victim is able to work again.
An alternative to buying a full life insurance policy for a child. Children receive small amounts of coverage.
Alternative Types of
Term Life Insurance
Return of Premium
If you outlive the policy, premiums paid over the course of the term are returned to you.
No Medical Exam
Policies such as Simplified Issue and Accelerated Underwriting
allow you to bypass the medical exam if you are qualified.
Mortgage Protection Insurance
Generally offered in 15 or 30 year increments to mirror your mortgage. Death benefit decline
is matched with the gradual decrease of your mortgage balance.