Life Insurance Policies
How does level term differ from decreasing term in the pattern of benefit and premium?
Answer and explanation
Answer: D. Both forms usually charge a level premium across the term, but decreasing term's face amount reduces on a schedule, which is why it is written against a mortgage or other amortising debt. Level term holds the face amount constant.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, level and decreasing term
More life insurance policies questions
- What right does the conversion privilege in a convertible term policy confer?
- What stays level throughout the term of a level term life insurance policy?
- What unbundled components characterize a universal life insurance contract?
- When does a joint life (first-to-die) policy pay its death benefit?
- When does a survivorship life (second-to-die) policy pay its death benefit?
- Which client is level premium term suited to?
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