Both level premium and stepped premium have advantages and disadvantages.
Level premium is more expensive in the beginning, but it won’t go up with age until age 65 or 70. So for the important insurance covers which should be kept for long term, level premium is cost effective and highly recommended.
Stepped premium is lower in the beginning, but it will increase every year with age and will be very expensive in the future. The reason that a lot of people cancel their policies when they turn old is just because they took stepped premium in the very beginning and can’t afford the premium when they are old while need the insurance most. So if you only want the insurance cover in short term or can’t afford the level premium at present, stepped should be the choice.
The following is an example of a comparison of level premium and stepped premium.
