What Is A Level Term Life Insurance Policy?
A Level Term Life Insurance Policy is a type of term coverage where payments remain consistent for the duration of the term. In contrast to permanent life insurance, term policies only provide a death benefit and do not have a cash value component. Level term policies can last up to 30 years, and riders can be added to provide additional protection and benefits at an additional cost.
| Term Policy Options | Permanent Policy Options |
|---|---|
| – Level Term Policy – Yearly Renewable Term Policy |
– Whole Life Policy – Universal Life Policy |
Permanent policies have a cash value component, which provides additional benefits that can be used while the policyholder is still alive. The cash value grows over time and can be used to pay premiums, borrow money, or surrendered for cash in retirement. Whole life policies have consistent payments for life, while universal life policies provide flexibility to adjust premiums within certain limits.
When determining the amount of coverage needed, financial professionals may use the Human Life Value philosophy, which considers lifetime income potential. A simple way to estimate coverage needed is to multiply salary by 30 if the policyholder is between 18 and 40 years old. Group life insurance policies may also be available through employers or member associations.
It is recommended to speak with a financial professional to determine the right coverage solution. Guardian, for example, offers an instant online quote and can connect individuals with knowledgeable professionals. The longer an individual waits to get life insurance, the more they typically pay, and it is essential to consider the length of the term and policy options before making a decision.
