Which of these life insurance plans holds the annual premium constant but decreases the face value of the policy each year?

Question

Quizplus · Accepted Answer

Decreasing term life insurance plans hold the annual premium constant but decrease the face value of the policy each year. This type of plan is usually designed to provide coverage for a specific period of time, such as a mortgage or a loan, and the face value decreases as the outstanding balance decreases. Credit life and mortgage life insurance are both types of decreasing term life insurance plans. Universal life insurance, on the other hand, is a type of permanent life insurance that offers flexibility in premiums and death benefits. Therefore, the correct answer is A) Decreasing term.

Which of These Life Insurance Plans Holds the Annual Premium