Level term life insurance is defined as a life insurance policy that pays out a lump sum in case of the policyholder’s death during the term of the policy. When selecting such a policy, you have to decide the sum insured and the policy term. The sum insured at the beginning remains unchanged throughout the life of the insurance policy. It is important to note that this policy does not have any investment value.

It is called term insurance as you get the payment within a fixed term. It is called level as the amount of payment does not vary - it is always a predetermined amount. The amount of death benefit protection that you purchase will remain the same for the entire term period. The premiums you pay for this amount of death benefit may be the same for the entire period. It could be the same only for a specified period or it may increase later.

Level term life insurance policy provides a fixed amount of cover for a fixed term. In the case of your death during the tenure of the policy, the amount you are insured for will be paid to your beneficiaries or nominees in a lump sum. The policy ceases when a claim has been settled.

Level term life insurance means term coverage on which the face value and premiums remain unchanged from the date the policy comes into force till the date of expiry of the policy. Therefore, it is called level. The amount of coverage of the policy stays level which means that it pays out exactly the same amount in the last year as it would do in the first year.

This type of life insurance has the advantage of a low-cost life policy with coverage. Premium and coverage amounts vary depending on individual needs. If you happen to retire or if you even change jobs, you can keep your premium at the same level. A level term life insurance policy gives an individual a consistent cover all through its term while keeping the premium constant.