What Is Level Term Life Insurance & How Much Does It Cost In 2022?

Written By Licensed Agent Sa ElFebruary 10, 2022

Wouldn't it be horrible to check your email or (snail mail) and find a notice that your monthly life insurance premiums have increased or that your coverage has decreased?

Unfortunately, it happens all of the time; especially if you purchase the wrong policy.

what is level term life insurance

But there is a way to avoid this, and that is buy purchasing a level term life insurance policy. In this post we will discuss the cost of a level term life insurance policy, how level life insurance works, and how you can get the best level life insurance quotes today!

How Much Does Level Term Life Insurance Cost?

The average cost of level term life insurance is $631 per year or about $53 per month.  However, keep in mind that your final rate will be based on your individual situation in regards to tobacco use, health, age, and other factors.

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The final insurance policy premium for any policy is determined by the underwriting insurance company following the application.

As you can see, fastest way to get level term life insurance quotes is to use our quote tool above. Also, be warned that getting quotes on sites that require personal information could cause you to be called over 100 times. I wrote a guide about how to get term life insurance quotes without personal information to help you avoid just that.

What Is Level Term Life Insurance?

Level term life insurance is a term insurance policy that guarantees the premiums will stay the same for a specific term length; usually these terms are for 5, 10, 15, 20, 25, and 30 years. This means that no matter what your premiums are when you get approved for your policy, it will stay the same until the end of the term.

These policies have also been called fixed rate term life insurance since your rates are considered to be “Fixed” and non moving for the entirety of the policy. It also doesn't matter if your policy requires an exam or if you are looking at life insurance no medical exam quotes, both of these policies can be level term.

If we keep in mind that our rates never change for the life of the policy, then it starts to make sense why the longer level term you choose, the higher the premiums.

So, all things being the same, a 30 Year level term policy will always cost more than a 5 year level term policy. A majority of level life insurance plans, also known as traditional life insurance, policies include the option to renew your policy.  

However, when you renew your policy at the end of the term your rates will increase

Level Term Life Insurance Benefits

Some additional things to note about level premium term life insurance policies are:

  • Your Coverage Amount Will Never Change For The Life Of The Policy
  • As Long As The Policy Is In-Force The Premiums Stay The Same
  • It Is The Most Affordable Type Of Life Insurance Coverage
  • It Expires Based On The Term You Choose, In Either 5, 10, 15, 20 Or 30 Years.

Remember, your premiums will not fluctuate, they won’t go up or down no matter what happens to your health while you own the coverage.

This is always the best option for anyone who is on a fixed budget and can’t have their monthly expenses start to suddenly increase. 

When you are trying to choose the right life insurance policy it is essential to know all of the details.

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Best Level Premium Life Insurance Companies

Below is a list of the best direct term life insurance companies. These companies are mostly new to the industry and have created a whole new space for the industry.

Bestow

Bestow is the one of the newest entries into the field of level term life insurance. They offer the only true No Exam life insurance product in the market place. They created an in-house underwriting technology that allows for underwriting and approvals as fast as 5 minutes.  We have an excellent Bestow Review if you want fast coverage and no exam.

Haven Life

They are one of the first insurance companies to offer the more modern version of a direct and level term life insurance policy. Haven Life has coined the term Real Rate. The Real Rate gives you the ability to apply for underwriting approval before you have to pay. This is unique because most insurance companies require payment information before you get your Real Rate. I think Haven Life is on to something with this new concept to buying insurance. Please feel free to read our Haven Review

Ladder Life

Ladder Life is also a new into offering a level term life insurance policy and have come up with a unique concept of how someone should use life insurance. They believe in a system of Laddering coverage up and down depending on your specific situation and needs. It’s a solid concept of how you can manage your life insurance payments based on current life events and I am sure it will catch on soon. You should check out our Ladder Review.

Fabric Life

Fabric Life is the newest entry into the world of level term life insurance. They offer both an Accidental Death only product as well as a full Term Life Insurance product.  They also have come out swinging with some of the lowest life insurance rats in the space. We have even written a great Fabric Review.

Why You Need A Level Life Insurance Policy?

The main reason to purchase a level term life policy is because they are the most affordable and they allow you to save money over the life of your policy. You will know exactly how long the coverage you have will last, and you will also know what you exact cost will be month to month.

There are other product types that aren’t level like a graded death benefit policy or and mortgage protection insurance policy.  The two policies both have limitations when it comes to being level.

How A Graded Death Benefit Policy Works?

A Graded death benefit policy will have a level premium, but not a level death benefit for the first 2 to 3 years. During the first few years, your coverage amount (death benefit) is only the premiums you have paid into the policy + a few percentage points. This means you must live for the specified period before your benefits will “Grade Up” to the full benefit amount.

How Mortgage Protection Life Insurance Works?

Mortgage protection insurance, which is also called decreasing term life insurance policies work in the exact opposite way as a level term. Therefore the longer you have a decreasing term policy, the lower the coverage will be and the lower the premiums will go. Eventually you won’t have any coverage at all. Decreasing term policies are sort of dated and most companies are starting to not offer them anymore. Based on all of the options, your best bet is going to be a level term life policy.

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The Future Of Level Term Life Insurance

Level term life insurance is the most common type of term life insurance in the market.

The companies that I mentioned above are some of the pioneers of this industry because of the technologies that they created surrounding their life insurance products.

Several life insurance companies are entering the arena now like Bestow with their Instant Life Insurance products. Currently, they are the only company that plan to offer both direct and instant coverage online.  

This means that not only will you be dealing directly with the insurance company, but you will be able to get a quote, apply online and be covered before the end of the day.  

I can see the Level Term Life market to continue to grow because most other options just don't make sense.

Taking Action

Either way, choosing a level term insurance policy will help keep your family protected, decrease your overall costs over time and help you avoid random expenses.  

Don't wait around, you can click here or on any of the above buttons to get an instant quote and immediate coverage.

Frequently Asked Questions


What is the difference between level term and decreasing term life insurance?

The primary differences between a level term policy and a decreasing term life insurance policy is that the death benefit of a level term policy will never change.  Death benefits of a decreasing term policy will decrease over the life of the policy down to a specific amount. These policies are usually used for mortgage protection insurance.

How does a term life insurance policy work?

The way a term life insurance policy works is that you are given a set amount of coverage, for a specific monthly premium, over a set period of time.

Should I get level term or decreasing life insurance?

In my professional opinion, in any case of purchasing life insurance you should always get a level term life plan. There isn't any real reason to purchase a policy that will decrease in its benefits over time.

Should I get decreasing life insurance?

At Simply Insurance we do not recommend purchasing a decreasing life insurance policy for any reason.

Does Term Life Insurance decrease in value

Term life insurance itself does Not decrease in value; however, there are some policies that have a decreasing feature attached to them, always ask if your policy is level or not when dealing with life insurance.

What is annual renewable term life insurance?

An annual renewable term life insurance policy is a life insurance policy that will renew once per year with a new rate. This product is also known as short term life insurance.

How does decreasing term insurance work?

The way decreasing term insurance works is that your death benefits will start out at a high amount, let's say $500,000 and then over the term, let's say 20 years; it will decrease down to maybe a $50,000 death benefit, the monthly premiums will decrease as well.


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