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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.
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.
Yes, you can usually customize your coverage with common riders for an extra fee, like an accelerated death benefit or waiver of premium rider.
When your term ends, your life insurance coverage expires. At this point, you have a few options:
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.
Best term life insurance companies
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:
This type of coverage has the following drawbacks:
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:
Age | $250,000 coverage | $500,000 coverage | $1,000,000 coverage |
---|---|---|---|
25 | $13.64/mo | $20.36/mo | $33.18/mo |
35 | $14.82/mo | $22.90/mo | $38.44/mo |
45 | $28.28/mo | $46.75/mo | $84.27/mo |
55 | $63.37/mo | $111.24/mo | $209.03/mo |
65 | $191.86/mo | $360.60/mo | $683.69/mo |
*Sample rates provided by Quotacy and valid as of May 2018 in all states except New York and Montana.
If level term life insurance isn’t the right fit for you, explore these options:
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.
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