Compare level term life insurance

If you want a policy with predictable premiums, level term life insurance might be a good fit. It offers temporary coverage for the years you need it most — but you may face higher rates if you decide to buy a new policy when the term ends.

What is level term life insurance?

Level term life insurance is a standard term life policy that lasts for a specific number of years, like 10, 15, 20 or 30. You’ll pay the same amount in premiums each month or year until the term length is up — and your coverage will expire. Level term life insurance is the most common type of term life insurance.

If you die before the end of your term, your beneficiaries will receive a guaranteed death benefit equal to the face value of your policy. So, if you have a $500,000 policy, your loved ones will get a $500,000 payout.

Can I add riders to my level term life policy?

Yes, you can usually customize your coverage with common riders for an extra fee, like an accelerated death benefit or waiver of premium rider.

What happens at the end of the term?

When your term ends, your life insurance coverage expires. At this point, you have a few options:

• Purchase a new policy. You can take out a new term or permanent policy — but you’ll likely pay a higher premium now that you’re older.
• Let your coverage lapse. If you no longer want or need policy, you can simply do nothing and go without coverage.

If you bought a policy with a conversion feature, you can upgrade to a permanent policy before a deadline. However, the deadline is usually within the first five years of taking out a policy.

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Advantages of level term life insurance

Level term life insurance is popular among people with young families and outstanding debt to their names. These are the pros of this policy type:

• The premiums stay the same. You know exactly how much you’ll pay each month, making level term life insurance easier to budget for.
• It’s straightforward. Term life insurance has a simple purpose: To provide your loved ones with a tax-free payout when you die.
• It’s affordable. Any type of term life is the cheapest type of life insurance, and typically six to ten times less expensive than whole life.
• No-exam options. You may be able to skip the medical exam when applying for coverage if you have pre-existing conditions or couldn’t otherwise qualify for a policy.

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Disadvantages of level term life insurance

This type of coverage has the following drawbacks:

• You’re only covered for a set period of time. Like all types of term life, level term life insurance offers temporary coverage. If you still need life insurance when your term is up, you’ll have to purchase a new policy.
• The death benefit is fixed. If you want the flexible to adjust the death benefit and value of your policy, you might want to look into permanent life insurance.

Level term life insurance rates

Level term life insurance costs as little as $20 a month. Compare average level term life insurance rates for a 20-year level term policy on individuals in perfect health:

*Sample rates provided by Quotacy and valid as of May 2018 in all states except New York and Montana.

Alternatives to level term life policies

If level term life insurance isn’t the right fit for you, explore these options:

• Annual renewable life insurance. Often shortened to ART, these policies last for a year and premiums start low, though they get substantially more expensive each time you renew. This is ideal if you want short-term coverage until you can afford a longer term policy.
• Decreasing term life insurance. With this policy, the death benefit goes down as you age and as your financial obligations decrease. Consider decreasing term life if you only want to cover a big debt you’ll repay over time, like student loans or a mortgage.
• Layer term life policies. This is as strategy rather than an actual policy. It involves stack multiple term life policies that match your financial responsibilities and expire over time. You might consider layering policies if you have multiple debts that drop off over time, such as a mortgage or kids entering college at different times.

Bottom line

Level term life insurance is the simplest policy on offer, and it’s popular for its predictable premiums. If you’ll only have financial dependents or obligations for a set number of years, it might be a good choice. But you’ll have to pay your premiums on time to avoid a policy lapse, so it’s worth comparing life insurance companies to get the best price.

Frequently asked questions

• How does my insurer determine my rate?

  There are several factors that go into determining the cost of life insurance. Some, like your age and gender, are out of your control. However, aspects you can affect include:

  1. Doing your best to stay in good health
  2. Driving safely to maintain a safe history
  3. Keeping up with debts to maintain a decent credit score
  4. Limiting risky hobbies like skydiving
  5. Conducting thorough research to find the best deal

• Can an insurer cancel my level term policy if my health declines?

  No. Regardless of what happens, your benefit will stay the same until the term length is up.

• What is level benefit term life insurance?

  Level benefit term life insurance is another way of saying level term life insurance — it’s the same thing.