Level Term Insurance offers a level premium and a level death benefit during the specific term of the coverage, from the time the policy is put into force until the policy expires at the end of the term.
Example of Level Term Life Insurance:
For example, if you purchase a 15-year level term policy with a face amount of $100,000, your premium payment stays the same each year for the entire 15 year period. If you die during that 15-year period, your beneficiary receives the $100,000 death benefit, tax-free.
Not all level term policies are Guaranteed Level for the life of the policy. Also, your premiums will increase at the end of the initial level premium term if you choose to renew your term insurance policy.
If you renew, you may be required to prove insurability for coverage by re-qualifying for the life insurance. The insurance company may require that you take a medical exam. If your health has deteriorated you may not be insurable, meaning you may not qualify for a life insurance policy.
Non-Guaranteed Level Term Insurance
Provides coverage for a shorter period of time. Usually this type of policy is purchased by younger adults or people who have financial obligations that will change after a period of time, such as a car loan, college loan, or some other short-term personal financial obligation.
Guaranteed Level Term Insurance
Provides a level premium and a level death benefit throughout the life of the policy. The policy may be converted to permanent life insurance without proof of insurability - you won’t be required to take a medical exam. However, once the policy expires, for example after the end of the 20 years on the policy, the coverage expires.
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