What does "level premium" mean in life insurance?

What does "level premium" mean in life insurance?

• A. A premium that increases over time according to inflation
• B. A premium that does not change over the life of the policy
• C. A premium based on the insured's health status
• D. A mathematical average of premium costs

Answer: (B)

A "level premium" in life insurance refers to a premium amount that remains constant for the duration of the policyholder's contract. This means that once the policyholder establishes their premium, it will not fluctuate with age, health changes, or inflation. This consistency allows policyholders to effectively budget their insurance costs over time, as they won't face unexpected increases in premiums as they grow older or if their health declines. This feature provides a sense of financial stability for the policyholder, as they can plan accordingly without the concern of escalating costs throughout the life of the insurance policy.

A "level premium" in life insurance refers to a premium amount that remains constant for the duration of the policyholder's contract. This means that once the policyholder establishes their premium, it will not fluctuate with age, health changes, or inflation. This consistency allows policyholders to effectively budget their insurance costs over time, as they won't face unexpected increases in premiums as they grow older or if their health declines.

This feature provides a sense of financial stability for the policyholder, as they can plan accordingly without the concern of escalating costs throughout the life of the insurance policy.