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What is a Level Term Life Insurance policy?

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What is a Level Term Life Insurance policy?
September 12, 2023

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Everything you need to know about Level Term Insurance

Term insurance may sound complicated to a lot of people and be overwhelming but that’s not necessarily the case. If you do plan to buy a policy you must ensure that you understand the difference and pick the right policy that meets your needs otherwise you will end up paying more term insurance premiums than you expect.

Find out more in our helpful guide explaining in detail about Level Term Insurance and how it can financially support your loved ones if you pass away.

What is a Level Term Life Insurance policy?

Level Term Insurance is a life insurance policy where the policyholder pays fixed term insurance premiums throughout the policy tenure, in other words, the amount of cover is ‘Level’. It is cost effective and pays death benefits to the nominee in event of sudden demise of the policy holder during the entire tenure of the policy. This means you can protect your family's financial future without burning a hole in your monthly budget with excessive premium payments.

Why should you opt for a Level Term Life Insurance policy?

You may not always be around to look after your family and hence a Level Term Life Insurance will payout the death benefits to your nominee or family to fulfill any financial obligations they may have. The Level Term Insurance Plan covers typically a period of 10 to 30 years. It certainly gives you the peace of mind knowing it will cover any expenses, household bills, education, loans, etc. in your absence.

Key features and benefits of Level Term Life Insurance policy

  • Straight Forward:

    This policy is very transparent, basic and easy to understand. The policyholder is always aware of the term insurance premium amount which stays the same during the tenure and how much the beneficiary will receive unless you outlive the policy tenure. There are also no hidden charges applicable on this policy.

  • Tenure:

    It typically offers 5, 10, 15, 20 or even 30 years tenure so you can choose the coverage based on your life goals.

  • Cost:

    It is also cost effective and can help you effortlessly budget everything along with your everyday expenses and cost of living.

  • Stability:

    It is a stable plan as it allows the policyholder to decide the maturity amount by mutual decision between the insured and the insurer.

  • Payout:

    The benefit is paid out in lump sum and generally tax-free.

  • Health Benefit:

    If your health is good you can avail health benefits in this plan that will allows you to get higher coverage easily.

  • Yearly Renewal:

    The policy renewal happens every year. When the tenure of your policy expires, so does your life insurance cover.

To wrap it up, whichever type of Life Insurance policy you take out, you have to ensure that the financial protection of your loved ones are protected. Having said that, Level Term Insurance is the most preferred as it is not only affordable but you do not have to worry about increasing premium or decreasing sum. 

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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