Level Premium

Last Updated: December 21, 2017

Definition - What does Level Premium mean?

A level premium policy is a life insurance policy that keeps the same premium rate for the duration of the entire policy. It differs from other types of life insurance policies, which have premiums that rise over the years.

Insuranceopedia explains Level Premium

Life insurance policyholders usually pay a higher premium for their life insurance as they get older. As people age, they have greater health risks and are, therefore, considered a higher financial risk for the insurer.

Policyholders who purchase level premium insurance will start off with higher premiums than they would if they purchased an ordinary term life insurance policy. But, thanks to the steady premium rate, they will eventually pay a lower rate than their counterparts.

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