What is Level term Life Insurance
Level term life insurance is a type of coverage where the death benefit and premiums are set when the policy is purchased, and remain the same over the life of the policy. Level term life insurance is the most popular and affordable type of term life policy on the market.
Level term life insurance, often referred to as a level premium policy, is the most prevalent and popular type of term life insurance. When most people talk about “term life insurance,” they’re referring to level term policies.
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How does level term life insurance work?
Level term life insurance is unique due to the fact that its premium and death benefit never change — they remain constant throughout the policy’s lifespan.
Aside from that, level term life insurance works similarly to other types of life insurance policies:
- You choose a coverage amount and term length. These, as well as your health and age, affect the cost of your term life insurance policy.
- You pay premiums monthly or annually.
- If you die while your coverage is in place, a tax-free cash benefit is paid out to your named beneficiaries.
- If you outlive the policy, it expires and you stop making premium payments.
To get health coverage, you must fill out an application and a questionnaire about your medical history. Depending on your policy, you may or may not be required to take a medical exam as part of the underwriting process, which is used by life insurance firms to assess risk; some insurance companies provide no-medical-exam plans to applicants who meet certain criteria.
When you receive your policy offer, you can choose to pay the first premium and sign paperwork to activate your policy. After that, all you have to do is pay the monthly or annual premiums for the remainder of the term and you’ll be insured.
Should you get a level term life insurance policy?
You should get a level term life insurance policy for the following reasons:
- If you have financial obligations such as a spouse, children, or a mortgage, level term life insurance is probably a good option for you.
- Alternatively, if you’re young and know you’ll be working toward those milestones in the future, applying to lock in low premiums can be a good idea.
- You can secure in low rates for the next 10 to 30 years with a level term policy. This means that if your health changes, your rates will not change unless you cancel the policy and request for a new one.
SOURCE: Papergist.com
