What Does Level Refer To In Level Term Insurance?

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Level term insurance is a type of term life insurance that offers a fixed benefit payout for a fixed “level” premium throughout the entire length of the policy term. In contrast, renewable term policies require a renewal and increased premium periodically, usually every five years. A level term life policy offers a predetermined amount of coverage for a specific amount of time that expires at a predetermined end date. Most people buy level term policies to cover long periods of time, giving them the comfort of knowing they will have coverage for that entire time regardless of changes that may occur to their health or insurability.

Death benefits in a level term life policy do not change, whereas decreasing term insurance offers a death benefit that decreases over the policy’s life. Level term policies offer a straightforward safety net that can be customized by the length of the term, the premiums, and coverage amounts. The amount of coverage you need will depend on your individual situation and goals.

Here is a comparison table between level term insurance and renewable term insurance:

Term Insurance Type Benefit Payout Premiums Term Length Renewal
Level Term Insurance Fixed Fixed Predetermined No renewal needed
Renewable Term Insurance Varies Increases periodically Usually 5 years or less Needs renewal with increased premiums
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