Types of Policies
An annual renewable term policy keeps the same death benefit for each one-year term. What normally happens to its premium from year to year?
Answer and explanation
Answer: A. Annual renewable term maintains level death-benefit protection for each term while premiums increase each year. Term insurance generally does not build cash value, and neither a waiver nor conversion to single-premium funding follows automatically.Source: New York State Department of Financial Services — Consumer Life Insurance FAQ — What are the main types of term life insurance available for purchase? > Annual renewable term insurance
More types of policies questions
- When does a survivorship life (second-to-die) policy pay its death benefit?
- When is a second-to-die life policy’s death benefit triggered?
- Which combination of features defines a variable universal life (VUL) contract?
- Which combination of features most clearly signals variable universal life rather than ordinary whole life?
- Which description best distinguishes indexed universal life from variable universal life?
- Which description best matches a standard decreasing term life policy?
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