Life Insurance Policies
A twenty year level premium term policy reaches its twentieth anniversary and the insured wants to keep the cover. What usually happens to the premium?
Answer and explanation
Answer: B. After the guaranteed level period these policies typically continue year by year at rapidly increasing attained age rates, which is why owners convert or replace before that point. The face amount is not reduced and the level guarantee does not renew itself.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, level premium term after the level period
More life insurance policies questions
- For what periods is level premium term commonly issued?
- How do a cap and a participation rate each limit the interest credited on an indexed policy?
- How do contributory and noncontributory group plans differ in participation requirements?
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- How does annually renewable term differ from a ten year level term policy?
- How does fixed indexed life differ from variable life in where the risk falls?
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