Level Term Life Insurance: A Comprehensive Guide

 

What is Level Term Life Insurance?

 

Level term life insurance is a form of life insurance that pays out a fixed amount of money if the policyholder dies during the policy period, usually between 10 to 30 years. 

 

The most important characteristic of this insurance type is that the cost and the coverage don’t change over time. In plain terms, the sum assured and the premium will be the same, whether on Day 1 of your policy or just before its expiry. 

 

This stability makes it a preferred option for many people who want a clear understanding of their financial situation in the future.

 

 

Key Features of Level Term Insurance

 

• Fixed premiums that don’t change during the policy tenure
• Defined term lengths — usually in terms of 10, 20, or 30 years
• Death benefit, i.e. the payment made to the beneficiaries on the death of the insured person during the term of the policy
• Level term life insurance with no medical exam might be available, although subject to declarations

 

Why Choose Level Term Life Insurance?

 

• Peace of Mind

With this insurance type, you can be assured that your family will have financial protection even if something happens to you. With a level term policy, you can easily get high coverage for your family at reasonable rates.

 

• Affordability

Unlike whole life insurance, the costs are usually less. While the coverage amount won’t decrease or increase, the low level term life insurance rates and the benefits of this type make it suitable for most families.

 

• Predictability

Another benefit of level term life insurance, also sometimes called level premium term life insurance, is that the costs are easy to determine. As the premiums don’t change over time, you can easily plan your insurance expenses throughout the years. This way, you get time to plan and adjust the premiums in your monthly budget.

 

• Simplicity

The relatively uncomplicated structure of level term life insurance policies, especially those that don’t involve a medical examination, makes it easier to get. This, in fact, also makes coverage available to more people.

 

What are the Benefits of Level Term Insurance?

 

Check out the numerous benefits of this type of insurance — 

 

• Financial Security Guaranteed

In unfortunate circumstances, your family can pay their bills and expenses using the amount from your level term insurance policy. This way, they can pay off any existing debts and carry on with their lives without worrying about how they will survive.

 

• Fulfilment of Life Goals

Even in the unfortunate case of your death, your family won’t be left without any financial coverage. With the sum assured, they can still cover major expenses related to major life milestones like —

1. Children’s education
2. Marriage
3. Maintenance of lifestyle
4. Paying off major loans 

 

• Affordability and Ease of Understanding

 

As we saw earlier, buying term insurance is not an expensive affair. It has now become easy to buy level term life insurance after evaluating your requirements, and this can be done online too!

 

• Optional Coverages

 

With this type of term insurance, you can get many types of optional coverages through add-ons or riders. Among the most popular add-ons is critical illness insurance. 

 

While term insurance covers death, this rider covers critical illnesses while the policyholder is alive. The policy simply gives a lump sum amount to you if you’re diagnosed with any critical illnesses. You can use this amount to cover expenses related to your medical treatment, loss of income, day-to-day requirements, and more.

 

Which is the Best Level Term Life Insurance Policy for You? 

 

This, obviously, will depend on your coverage needs and various other requirements! However, we’ve listed some of the most popular plans below — 
 

 

Types of Level Term Life Insurance 

 

While you can find several types of level term life insurance policies out there in the market, we will discuss the major ones as per their tenure below — 

 

10-year Level Term Life Insurance

 

With a policy tenure of 10 years, this insurance type is suitable for those who need coverage for a short term. Usually, this is the case with people who have taken loans for the same period. It has relatively cheap rates compared to the policies that are valid for a longer period.

 

Check out the general 10 year level term life insurance rates below —

 

Average Rates Starting from*  For a healthy 35-year-old —

• Male: AED 32 per month for AED 500,000 coverage
• Female: AED 26 per month for coverage of AED 500,000

 

20-year Level Term Life Insurance

 

As the name suggests, this policy comes with a tenure of 2 decades. 

 

It is ideal for those who need to meet long-term expenses such as paying for a house or their children’s college tuition fees.

 

Average Rates Starting from*  For a healthy 35-year-old —

• Male: AED 46 per month for AED 500,000 coverage
• Female: AED 39 per month for coverage of AED 500,000

 

30-year Level Term Life Insurance

 

The longest option here, it offers coverage for a long tenure, which can be helpful for young parents or those with long-term financial obligations.

 

Average Rates Starting from*  For a healthy 35-year-old —

• Male: AED 82 per month for AED 500,000 coverage
• Female: AED 64 per month for coverage of AED 500,000

 

*For a non-smoker male with a monthly salary of AED 7,000. Actual rates may vary depending on several factors, including but not limited to age, health status, policy term, and coverage amount. The rates mentioned above here are subject to change and should not be considered final or guaranteed. 

 

What is the Level Term Insurance Cost?

 

As we saw earlier, although level term life insurance premiums vary, you can have a general idea of the prices below* —

 

 

*For non-smokers with a salary of AED 7,000 per month. Actual rates may vary as per various factors — age, policy term, health conditions, and the sum assured. Please note that the rates above here are subject to change and must not be considered final. 

 

Which Factors Affect Level Term Life Insurance Rates? 

 

Here’s a quick overview of the factors affecting the premiums of this insurance type — 

 

• Age: Younger applicants are likely to pay a lower premium than older applicants. This is due to a lower risk of health conditions or mortality as per insurers.
• Health: People with better health conditions are usually offered better rates, as they are less likely to develop conditions that may lead to death over time. 
• Policy Term: The longer an insurer covers a person, the higher their risk. To compensate for this, higher premiums might be charged.
• Coverage Amount: The equation is quite straightforward — the higher the coverage amount, the higher the premium.
• Lifestyle habits: If you regularly smoke or drink, your premiums can be higher due to a higher risk of death. 

 

How to Apply for Level Term Life Insurance? 

 

With Policybazaar.ae, you can buy level term life insurance in the easiest way possible. 

Right from the comfort of your home, you can make a few clicks. With this, you can not only compare the best term insurance policies but also get the most suitable one for yourself. 

 

Here are the steps —

 

• On Policybazaar.ae, click on the ‘Term Insurance’ category.
• Head to the term insurance page. 
• Fill out the form — this will take you to the level term insurance quotes page.
• Take all the time you need to check and compare these plans. 
• Once decided, apply for it. 

 

While applying, note that you may have to go for a medical check-up as well. Nevertheless, there are insurers that offer level term life insurance with no medical exam, although declarations might be needed.

 

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