Level Benefit: This means the policy will begin immediately and will not have any waiting period for the coverage to begin. Level benefit whole life means as long as the insured has paid their premiums on time, the death benefit will be paid in full to their beneficiary at any time the client passes away. Typically a client will need to be free of any terminal health conditions in order to qualify.
Graded benefit: Typically a graded policy will have a two to three year waiting period before the policy will pay out the death benefit due to an adverse health condition on the insured. If the insured passes away before the two year waiting period, the insurance company will typically pay the beneficiary any insurance premiums paid by the insured along with an additional 10%. If the insured passes away after the two year waiting period the full death benefit will be paid to the beneficiary.