level premium

  • Under this plan in life insurance the amount of the consideration is the same (level) for all the years of the assured’s life during which the premiums are to be paid. The premium remains the same from year to year, and in general is more than the actual cost of protection in the earlier years of the policy and less than actual cost in the later years. The excess paid in the earlier years builds up the reserve.

    Internal Revenue Service 1

1Internal Revenue Service, Internal Revenue Manual 4.42.6 Glossary, http://­www.irs.gov/­irm/­part4/­irm_04-042-006.html (last accessed Dec. 22, 2009).