Compare quotes and save on the most affordable coverage to protect your loved ones
Level term life insurance is a form of term life insurance that lasts for a set amount of time – the term – before expiring. The premium paid for this policy remains level, guaranteed to not increase during the term. Level term life insurance is an affordable, straightforward form of life insurance and is what most people picture when they think of buying life insurance.
Level term life insurance offers predictable coverage you know you’ll always be able to afford. Compare this to annual renewable life insurance, a more complicated type of term life insurance that offers a low premium in the first year of the policy, but increases every following year in the term.
|Level Term Overview||Annual Renewable Life Insurance Overview|
|Duration||1-30 years||1 year, renewable for set number of years|
|Guaranteed Death Benefit||Yes||Yes|
|Guaranteed Cash Value||No||No|
|How Cash Grows (or Shrinks)||-||-|
|Premiums||Guaranteed to remain level||Increases each year policy is renewed|
|Notes||Best option if you'll need coverage for a number of years||Cheaper initially, but more expensive later. Best for short coverage period|
Level term is the most basic form of term life insurance and usually offers the most affordable rates over the course of a 20- or 30-year term. Additionally, most insurers offer a slight discount for paying premiums annually instead of monthly. Here are sample rates for a 20-year level term life insurance policy:
|Annual Payment||Monthly Payment|
|$100,000||$105/ year||$19/ mo|
|$250,000||$150/ year||$13/ mo|
|$500,000||$240/ year||$21/ mo|
|$1,000,000||$425/ year||$37/ mo|
Methodology: Sample based on lowest cost average from top carriers for a 30 year-old male in highest health classification in the New Jersey area.
Riders are modifications a policyholder can make to their level term life insurance policy to tailor it to their needs. Riders may come at an additional cost or may be provided by the life insurance carrier for free. Popular riders for level term life insurance policies include:
The premiums paid will be returned, minus any fees, to the you if you outlive the policy.
If you would rather avoid the medical exam that normally takes place to set your premium rates, you can opt for a No Medical Exam policy, such as an Accelerated Underwriting or Simplified Issue policy, which allow qualified applicants to skip the medical exam.
Mortgage life insurance is usually offered in 15- or 30-year increments to line up with your mortgage. To that end, the beneficiary is usually the mortgage lender and the death benefit gradually decreases to match your remaining mortgage balance.