Level Term Life Insurance

Level term life insurance is the most popular type of term life insurance coverage, and lasts for a pre-determined amount of time. With a level term life insurance policy, your rates stay the same for the full term length. Level term life insurance rates start at an average of $17/month for $100,000 of coverage on a 30-year-old, and the younger you are when you buy, the better your rates will be.

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Dec 1, 2020

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Quick Facts

  • With term life insurance, your policy will cover you for a selected period of time.
  • Using level term life insurance means your payout and premium will not change over time.
  • A level term policy can usually be renewed.

Level term life insurance is a form of term life insurance that many people opt to get, as it comes with the guarantee your beneficiaries will receive a set amount of money in the event of your death. 

Level term life insurance is one of the most popular and affordable life insurance policies available, which is why some consider it the best term life insurance form. However, there are some reasons that a different type of policy might be right for you and your family.

Using our guide below will help you discover the best level term life insurance options for you and your family. To compare level term life insurance quotes from top insurance companies, use our tool above.

What is level term life insurance?

Before we can get into whether or not this kind of insurance is right for you, we should go over what term life insurance actually is.

Term life insurance policies involve the policyholder and the insurance company agreeing on a specified “term” during which, if the policyholder dies, their beneficiaries will receive the life insurance funds tax-free.

This policy can be renewed or changed to a different type of life insurance policy, in most cases. There is an end date to level term life insurance, meaning it can expire.

If you don’t renew your term life policy and the term expires, then your beneficiaries won’t receive the funds. The payout amount of some term life insurance policies can decrease over time, which is why some opt for level term life insurance.

The main difference when comparing level term life insurance vs term life insurance of other types is premium payments. With level term life insurance, the price of your payout won’t change regardless of when you die, as long as it occurs within the “term.”

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How much does level term life insurance cost?

As with most types of life insurance, you will be required to pay a monthly or annual premium for your level term life insurance policy. These premium prices, as well as your death benefit amount, should be agreed upon before anything is signed.

A life insurance agent will likely base your level term life insurance rates on several factors, including your age, medical history, and health. You will also have to undergo a medical exam.

Life insurance companies usually use a “rating system” for those interested in applying for term life insurance, which can be seen in the chart below.

Term Life Insurance Rating Classes

Term Life Rating ClassWhat it Means
Super PreferredExcellent health w/no major medical conditions
PreferredVery good health w/some minor medical conditions
Standard PlusGood health w/some moderate medical conditions
StandardAverage health w/some medical conditions
SubstandardPoor health w/some major medical conditions
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As you can imagine, those in the “super preferred” category will usually receive better rates. Make your life insurance policy search easy by using our comparison tool.

Take a look at some sample term life insurance rates by age below.

Several-Term Policy Sample Rates
Age $250,000: 10-Year Term$250,000: 20-Year Term$500,000: 10-Year Term$500,000: 20-Year Term
30$17.00$20.00$25.00$33.00
40$22.00$30.00$35.00$51.00
50$39.00$53.00$65.00$97.00
60$78.00$130.00$140.00$240.00
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You can also see that level term life insurance for seniors is likely to be either expensive.

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What are the pros and cons of level term life insurance?

As with most insurance policies, there are level term life insurance advantages and disadvantages. It’s important to learn about both in order to determine if level term life insurance is truly the best option for you.

One of the main pros for level term is that you know exactly how much you will be paying per month or year and how much your beneficiaries will receive upon your death. Another big benefit of level term is that it is usually more affordable than other life insurance policies.

One of the cons with level term life insurance, as is with all forms of term life insurance, is that the policy expires over time. While you can renew the policy after your term has expired, this will often result in paying a higher premium.

Another con is that you won’t receive back the premiums you’ve already paid should your policy expire.

Finding the Right Life Insurance Policy

Buying life insurance can be a confusing and time-consuming process, as there are many different options out there, including permanent life (whole life insurance), universal life insurance, decreasing term life insurance, and more.

This video talks about the differences between these types of life insurance policies.

Life insurance is necessary for making sure your family is well taken care of after you pass on, so you’ll want to make sure you’re getting the right policy.

The first step is determining your exact needs for life insurance. Say you’re married and you have children. Your life insurance needs will be much different from a single person’s.

You’ll want to make sure that your policy covers everything you believe your family may need, including school funds and other forms of child care.

Another thing to determine is the premium rate you’re willing to pay. You shouldn’t pay more than is comfortable for you, but it’s also important to make sure you’re getting the right amount of coverage.

A good life insurance agent can take your current situation into account and help you determine a good policy and rate.

All this being said, there are documents you will need to have on hand, including your ID, birth certificate, or green card. Pay stubs or other proof of income are usually required as well.

When you’ve determined your needs and wants, you can start shopping around for am affordable level term life insurance policy that meets all of them. If you want to buy level term life insurance now, use our comparison tool below for free quotes.

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