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Term insurance policies are a variant of life insurance plans that focus purely on death benefits. It means, in the case of a policyholder’s demise, the family members will receive a lump sum amount to meet their financial responsibilities. Now, there are many subsets of term insurance plans and a popular one is a level term insurance plan.

So, if you are planning to purchase this insurance plan, then we have taken the liberty to note down a few essentials related to it. This will help to streamline your research further.

What is a level term life insurance policy?

Level term insurance policy, as mentioned above, is a subtype of the term policy where you, the policyholder, pay fixed premiums throughout the policy tenure. Hence, the benefits of policy also remain ‘level’ or unchanged. 

It is a cost-effective policy providing death benefits to the beneficiaries in case of the sudden demise of the policyholder during the policy tenure. Therefore, with such an term insurance plan, you can safeguard your family's financial future without burdening yourself with hefty premium payments.

Types of level term insurance plans

Various level term policies are available to choose from. You can pick one according to your family’s financial obligations in mind. Here are the types of level term plans available in the UAE

  • 5-year level term insurance policy: These level term insurance policies have a tenure of five years and are significantly beneficial for individuals who want coverage for a short duration.
  • 10-year level term life insurance plan: As the name suggests, this level term insurance policy is most suitable for individuals who want to get coverage for 10 years. This plan is usually purchased by parents whose children are growing up and need money saved for their children's future like a wedding or higher education.
  • 15-year level term life insurance policy:  This plan may need you to bear a high amount of premium, but it also provides coverage for an extended period. These plans are best for individuals having long-term financial goals.

Apart from the types mentioned above, you can also get 20- and 30-year level term life insurance as per your requirements.

Best level term insurance policies

Picking up the best insurance plan according to your requirements needs research, time and effort. Here is a list of the best level term life insurance in the UAE with their salient features to help you save time.

Insurance Plan

Policy Term

Life Cover

Accident Cover

Premium Amount (Yearly)

HAYAH Insurance (Formerly AXA GCIC)

10 years

Up to AED 7.50K

AED 7.50K

AED 488

Noor Takaful: Pure Protection

10 years

Up to AED 3 million

AED 300,000

AED 600

Union Insurance Smart Term

10 years

Up to AED 250,000

100% of the sum assured

AED 154

National Life Term Plan

10 years

Up to AED 350,000

AED 350,000

AED 260

Noor Takaful Pure Protection Cashback

10 years

Up to AED 350,000

AED 350,000

AED 260

Takaful Emarat: Fixed term

10 years

Up to AED 3 million

AED 300,000

AED 215

Benefits of level term life insurance plan

A level term insurance plan is an outstanding financial product that enables you to ensure your family's financial future in your absence. Here are some notable benefits of this policy –

  • You can avail a comprehensive coverage through this insurance plan against affordable premiums.
  • This term insurance plan is a fundamental protection plan. Therefore, you don’t have to invest a lot of effort and time in understanding the policy terms and conditions, as they are straightforward.
  • Since there are different variants of this term insurance plan that can cater to your family’s financial obligations, you can select a plan according to your budget.
  • Many term insurance plans provide critical and terminal illness coverage. Depending upon the family history and susceptibility, you can choose a plan to fortify your fund in case of medical emergencies.
  • Term insurance plans provide global coverage implying that you can stay protected wherever you go.

If you want to buy a level premium term life insurance plan online, browse our website, compare and find the best possible deal for yourself.

Drawbacks of level term life insurance

With all the benefits of this term insurance discussed above, here we will discuss a few drawbacks to help you make an informed decision –

  • This term life insurance is not the best option if you are looking for permanent life insurance needs.
  • A level term insurance plan does not amplify cash value. If you cancel a term policy, then you won't get the money back unless you have purchased a policy offering return of a premium feature. In addition, such policies usually have higher costs.

Comparison of level term life insurance with other plans

Term insurance is usually offered in two varieties: a level term and a decreasing term. What sets a level term insurance policy apart from the other is that a level term plan will offer the same benefit specified in the policy term in case of the demise of the policyholder. In comparison, for the decreasing term policies, it reduces with each passing year.

Why should you buy level term insurance policies?

You should invest in a level term life insurance plan because:

  • This policy is very simple and easy to understand. Therefore, the policyholder and his/her beneficiaries will have a clear idea of how much financial support they will obtain in case of the policyholder's untimely demise.
  • A level term plan offers stability with coverage remaining the same and payment of the fixed premium amount for the entire policy tenure.
  • With the level premium option, the premium remains constant so that you can budget everything easily.

So, it is fair to say that a level term insurance plan is a cost-effective financial product offering substantial financial coverage. Moreover, you can choose your policy tenure according to your convenience and financial goals. And, the best part is that you don't have to worry about increasing premiums yearly. Besides, with some planning, you can ensure higher and better benefits in the future.

FAQs

Q1. Does a level term insurance policy offer cash value?

Ans: A level term policy does not provide cash value. However, after the policy lapses, you can convert it to earn a permanent life policy that provides cash value.

Q2. Does the premium amount increase after a specific time for level term plans?

Ans: The premium amount stays the same for every level term policy throughout the tenure.

Q3. What happens when my level term plan expires?

Ans: When your level term insurance plan expires, you will receive a notice from the insurance company stating that your plan has expired. In that case, you can stop paying the premiums and have no available death benefits.

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