Difference Between Level Term and Decreasing Term Life Insurance

What Is a Level Term Life Insurance Policy?

What Is a Decreasing Term Life Insurance Policy?

Difference Between Level Term and Decreasing Term Insurance Policies

That said, the table below illustrates the key differences between level term and decreasing term insurance policies:

Parameters

Level Term Insurance Policy

Decreasing Term Insurance Policy

Death Benefit

Fixed payout amount

The payout amount reduces with time

When to Opt

Best for protection against interest-only mortgage

Best for protection against repayment mortgage

Affordability

Generally costlier than decreasing term insurance policy

At times, the cheapest type of life insurance policy

Why Do Insurers Conduct Medical Tests and Check-Ups for Term Insurance Plans?

Which Option Is Better Between Level Term and Decreasing Term Insurance Policy?

FAQs about Level Term and Decreasing Term Insurance Policy

What should I opt for a level term or decreasing term life insurance policy? up-arrow

Whether one should opt for a level term or decreasing term life insurance policy will totally depend on his or her personal requirements and future plans. Both of these insurance types provide financial protection to the beneficiaries if the policyholder dies.

What is the use of a level term insurance policy? up-arrow

Level term insurance provides fixed coverage to the beneficiaries if the policyholder dies during the specified policy tenure.

What is the meaning of a twenty year level term policy? up-arrow

If a candidate opts for a level term insurance for a period of twenty years, his/her family will receive a death benefit from the insurer in case of death during the twenty years term.

What decreases during a decreasing term insurance policy? up-arrow

In the case of decreasing term insurance, the death benefit during the end of the policy term decreases periodically.