Level term life insurance is simply a term life insurance policy in which the death benefit and premiums paid remain constant from the day that the policy is executed until the day the policy expires. This type of insurance product is also known as guaranteed level term insurance since the premiums that the insured pays do not change each year. For the most part you can expect to see term lengths of 10, 15, 20 and 30 years.
The calculations made to determine what the actual premium amount will be is often a confusing and complex subject. Suffice it to say what the insurer essentially does is add up all of the costs associated with each of the following years term rates and divide that amount by the term of the policy. Of course, you can fully expect that the insurer will also factor in such items as the time value of money and the insureds physical age. You will also find that policies with longer terms will usually have much higher premiums since it becomes much more expensive to insure people as they grow older.
Like most life insurance products, level term life insurance typically includes an option to renew the policy at expiration. Furthermore, the renewal rate is also guaranteed not to exceed a certain predetermined maximum rate if extended. Even if the policy you choose includes a renewal option you should carefully read the policy to determine whether or not you will be required to prove that you remain insurable. Many times, if the insured is in poor health, or has increased risk factors, the policy renewal can be declined.
Life insurance products provide death benefits to families at the time of passing. This benefit is intended to provide financial support for your dependents. Many families simply underestimate just how difficult it is going to be to pay for their kids college education, family medical bills, or merely the normal routine living expenses with half of the amount of income they are accustomed to having. As such, it is imperative that you take a few minutes and explore your life insurance needs now. Buying life insurance now can save you, or your loved ones, years of heartache and suffering.