The annual premium on a straight term policy can increase each year on an annual renewable term policy or remain level throughout the policy period on a level premium term policy.

Question

Quizplus · Accepted Answer

This statement is true. On an annual renewable term policy, the premium can increase each year as the risk of the insured dying increases with age. On a level premium term policy, the premium remains the same throughout the policy period, which is typically 10, 20, or 30 years.

The Annual Premium on a Straight Term Policy Can Increase