Benefits

• With a level premium and death benefit, you can be certain what your insurance costs are in advance. You are also certain of how much death benefit you have because the benefit does not increase or decrease over the course of the term.
  
  

Significance

• The insurance company charges you more than the actual cost of insurance. Then, the insurance company invests the excess premium to hold down the future cost of insurance.
  
  

Effects

• A level term life policy tends to be much less expensive over time than an annual renewable term life policy because part of the premium is invested on your behalf to hold down the future costs of insurance.