All You Need to Know About Level Term Insurance


Level term insurance is a type of term insurance that offers steady premium options throughout the policy term, along with death benefits.

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Level Term Insurance: An Overview

Term insurance is the purest form of life insurance that offers death benefits. There are further divisions of term insurance plans to best suit the customer's requirements. One of the commonly availed plans is level term insurance. More or less, it's similar to a term insurance policy; however, it is generally called a level benefit. Because it guarantees fixed death benefits in the policy.

What is Level Term Insurance?

Level term insurance is considered as a cost-effective form of term life insurance plan. It ensures to pay the death benefit to the nominee in the event of the sudden demise of the insured during the policy tenure. Also, it is known as a 'level premium term plan' - when the policyholder pays fixed premiums throughout the policy tenure. Thus, the premium and the death benefits remain the same in the level term insurance. Commonly, the level term insurance plan lasts from 10 years to 30 years, depending upon the requirements of the policyholder.

Benefits of Level Term Insurance Plan

By buying this policy, the policyholder can avail the following benefits:

  • Predictability-This policy is very basic and direct to understand. Here, the policyholder will always be aware of how much he/she will leave for the beneficiary, as long as one doesn’t outlive the policy. 
  • Effortless Budgeting-With the level premium option, it will be a lot easier for the policyholder to afford the policy alongside other livelihood expenses. Also, the maturity amount can be fixed by the mutual decision between the insured and the insurer. This helps the policyholder in effortlessly budgeting everything. 
  • Stability-The level term insurance plan comes with stability. The very fact that the coverage will remain the same, which keeps the policyholder stress-free about the future. Also, one can sense the stability while paying the fixed premiums for the entire policy tenure.
  • Health Benefits-While buying the level term insurance if you are in sound health, you can avail of health benefit on this plan. No matter what policy tenure you’ve opted for, if you are healthy, you will receive coverage higher than 15, 25, or 30 years (depending upon your chosen policy tenure)
  • Yearly Renewal-This one comes with a policy with a longer policy tenure. As you grow old, the policy renewal happens every year. This means, the coverage allowances progress with each passing year. It is more like an auto-replenishment of your already existing plan.

Level Term Insurance, Decreasing Term Insurance, and Whole Life Insurance: A Comparison


Level Term Insurance 

Decreasing Term Insurance

Whole Life Insurance

Death Benefit

Death benefit remains unchanged throughout the entire plan

Decreasing death benefit with each passing year

Stays active for insured’s entire life with a guaranteed death benefit

Premium Type

Fixed premiums for entire policy term.

Decreasing premium for entire policy term.

Level premium/increasing premium for entire policy.


5-30 years

1-30 years

Whole life


Cost effective

Cost effective


Tax Benefit

Comes with tax benefit

Comes with tax benefit

Comes with tax benefit

Wrapping it Up

Level term insurance plan is the most preferred and cost-effective form of term life insurance policy. You can choose from the offered policy tenure i.e. 5, 10, 20, or even 30 years as per your requirements and financial goals. However, it is advisable to always opt for a policy with longer-term to avail the maximum coverage. The best part about level term insurance is, you do not have to worry about the increasing premium or decreasing sum assured. With the right approach and budget, you can ensure higher coverage for your loved ones with the level term insurance.

Written By: PolicyBazaar

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