What is the definition of Level Premium Policies?

Level Premium Policies are policies that pay the same premium for the entire duration that the policy is in force.

This is commonly used for whole life insurance, as well as some term life insurance.

Level premium policies are different from level term policies. Level term policies are policies where the benefits remain the same. With level premium policies, the policy owner is able to create his long-term budgets and gauge whether he can afford the insurance coverage, since he already knows that the premiums will not increase.

It is important to note that the policy may be more expensive (with regards to premium payments vis-a-vis coverage) at the early part of the policy, that during the later years. However, this is expected to level out across the entire life of the policy.

• Insolvency
• Misstatement of Age or Sex Provision
• Modified Premium Policies
• Moral Hazard
• Comprehensive Coverage