With level term life insurance, policyholders can pay affordable premiums while still getting the coverage they need. If you were to pass away during your policy’s term, your loved ones can get financial protection to cover expenses. But you may be wondering whether you should get level term life insurance and if it can give you the right coverage. Let’s dive deeper into how level term life insurance works, the pros and cons, and how it compares to whole life insurance.
How Does Level Term Life Insurance Work?
Level term life insurance is a life insurance policy with a set premium and death benefit. These plans have term lengths that can typically range from 10 to 30 years, during which policyholders can get coverage.
With level term life insurance, you may choose the term length, the coverage amount, and whether you want to pay premiums monthly or annually. Your beneficiaries will receive a cash payout if you die while your policy is active. If you outlive the policy, the coverage will expire when the term is up.
Pros and Cons of Level Term Life Insurance
Here are some pros of level term life insurance:
- Affordability: Level term life insurance is the most affordable life insurance option for many people.
- Personalized coverage: You can choose the coverage level and term length so that you can get a level term life insurance policy suited for your needs.
- Predictable payments: Since your premiums are fixed, you’ll pay the same amount throughout the duration of a level term life insurance policy.
Here are some cons of level term life insurance:
- The term expires: Level term life insurance policies aren’t permanent, so you’ll lose coverage once your term expires.
- No premium refund: You don’t receive a refund of the premiums you paid if you outlive a level term life insurance policy.
Level Term Life Insurance vs. Whole Life Insurance
While level term life insurance policies last for a specified time, whole life insurance policies are permanent. This means that your life insurance coverage won’t expire. Because whole life insurance offers coverage for the rest of the policyholder’s life, these policies tend to be more expensive than level term life insurance.
Should I Get Level Term Life Insurance?
To decide whether level term life insurance is right for you, you should consider your budget and coverage needs. If you want an affordable option with fixed premiums and the flexibility to choose a term length, this policy can be a great option. But if you want coverage for a longer time period, you may want to consider getting a permanent life insurance plan. Weigh your options by comparing coverage and costs to find the right plan for you and your loved ones.