Level Premium

What Does Level Premium Mean?

A level premium policy is a life insurance policy with a fixed premium rate that remains constant for the entire duration of the policy. This contrasts with other types of life insurance policies, where premiums increase over time.

Insuranceopedia Explains Level Premium

Life insurance policyholders typically pay higher premiums as they age, due to increased health risks that make them a higher financial risk for insurers.

Policyholders who choose level premium insurance initially pay higher premiums than they would with a standard term life insurance policy. However, because the premium rate remains constant, they ultimately pay a lower rate over time compared to those with increasing-premium policies. Whole life insurance rates are typically built this way: the premium set when the policy is issued stays the same for as long as the policy is in force.