Life Insurance Policies
How does the premium of a level premium term policy compare with the mortality cost in the early and later years?
Answer and explanation
Answer: D. Levelling the premium means charging more than the true cost while the insured is younger, and the surplus supports the later years when the cost of mortality exceeds the premium. This is the same principle that produces cash value in permanent insurance, on a smaller scale.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, level premium term
More life insurance policies questions
- How is credit life insurance usually underwritten?
- How is interest credited to the cash value of a fixed indexed life policy?
- How is the amount of credit life insurance limited?
- How is the premium for credit life insurance ordinarily paid?
- How many death benefits does a joint life, first to die, policy pay over its lifetime?
- Is a single premium whole life policy issued without underwriting?
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