Level Premium Whole Life Insurance

Level premium whole life insurance has regular, identical premiums which must be paid until your life insurance policy matures (typically when you die).

Unlike term life insurance – which is cheaper when you are young and becomes more expensive to take out when you get older, level premium life insurance spreads the cost of insurance over your entire lifetime. The premiums which you pay when you are young are much higher than the risk you pose would justify. But the premiums which you pay when you are old are lower than the risk you pose would justify. The excess premiums which you pay in your younger years balance the relatively low premiums which you pay in your older years.

As with other forms of whole life insurance (known as mixed life insurance in Switzerland), level premium whole life insurance has a face value and a cash value. A portion of your premiums is used to purchase equity in your policy until your equity matches the policy’s face value – at which point the policy matures.

More on this topic:
Life insurance comparison

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