There is nothing more heartbreaking than waking up to realize that your monthly life insurance premiums have increased.
This is also the same when you find out that your coverage has decreased.
The good news is that there is always a way to go by it and that brings us to the term ‘Level Life Insurance’.
What is Level Term Life Insurance?
This is a type of insurance that guarantees your premiums remain the same until the end of the term.
The terms are averagely 5, 10,15, 20, and 30 years. So, all things being equal, a 30-year term policy will always be more costly than a 5-year policy.
This type of policy mostly includes an option to renew. The rates are subject to change only when you want to renew the policy.
Level term coverage usually comes to an end eventually based on the coverage you bought.
Here are a few things to note about level premium term life insurance policies:
- It expires based on the term you choose
- It is the most affordable type of life insurance cover.
- As long as the policy is in force, the premiums remain the same
- Your coverage amount will never change for the life of the policy.
This is the best option for someone on a fixed budget and won’t have their monthly expenses increased for anything.
Best Level Premium Life Insurance Companies
Let’s take a look at a few Best Level Premium Life Insurance Companies:
Bestow is the latest addition to the level term life insurance companies.
They give the only true No Exam life insurance product in the market.
They have a technology that allows for underwriting and approvals as fast as 5 minutes.
2. Haven Life:
They are among the first companies to offer the more modern version of a direct and level term life insurance policy.
They manufactured the term Real Rate which gives you the ability to apply for underwriting approval even before you have to pay.
This feature makes them unique because most companies require payment information before you get your Real Rate.
3. Ladder Life:
This insurance company has come up with a unique concept of how someone should use life insurance.
Depending on your unique needs, they have a system of Laddering coverage up and down.
This is the newest entry into the level term life insurance industry. They offer Full-Term Life insurance and an Accidental Death only product as well.
They also have one of the lowest life insurance rates in the industry.
Why You Need a Level Life Insurance Policy?
Aside from being the most affordable, a Level Life Insurance Policy allows you to save a lot of money over the course of your policy.
You will get to know what your exact cost will be month to month and also how long the coverage will last.
They have other product types that are not level like a normal death benefit coverage or a mortgage protection insurance policy.
The policies above both have limitations when it comes to them being level.
For the first 2 to 3 days, a graded death benefit policy will have a level premium but not a level death benefit.
Your policy coverage amount is a total of the premiums you have paid and a few percentage points during the first few years.
This means that you must be alive for the first few fears before your coverage benefit fully matures to the full amount.
The mortgage protection insurance policy also called decreasing term life insurance policy works in the exact opposite of the level term.
This means that the longer you have a mortgage policy, the lower your coverage will be and your premiums will be declining as well. Eventually, you will lose coverage altogether.
This kind of policy is sort of outdated and a lot of insurance companies are beginning to make them extinct.
Looking at all the options available, your best choice would be to go for a level-term life insurance policy.
Frequently Asked Questions:
What is the difference between level term and decreasing term life insurance?
The death benefit of someone on a level term policy will never change as compared to another on the decreasing term life insurance policy.
Death benefits of a person on a decreasing term will eventually decrease down to a specific amount. These coverages are usually for mortgage protection insurance.
How does a term life insurance coverage work?
With a term life insurance policy, you are given a specific set amount of coverage over a period of time for a specified monthly premium.
Should I get a level term or decrease life insurance?
There is no rationale to purchase a policy that will decrease in benefits over time. You should always get a level-term life plan in any case of buying life insurance.
How does decreasing term insurance work?
It works this way: Your death benefits will begin with a high amount and then decrease over time as well as the premiums.
Should I get decreasing life insurance?
It is not recommended but the choice is always yours to make.
Does Term Life Insurance decrease in value?
It does not decrease in value; however, you should always ask your insurance company if your policy is level or not especially when dealing with life insurance.
There are policies that have a decreasing feature attached to them so you should always be well informed before you make a choice.
What is annual renewable term life insurance?
This type of life insurance policy will renew once every year with a new rate. This product is also known as short-term life insurance.