Life Insurance FundamentalsQuestion 140 of 315

Which life insurance design starts with lower premiums during the first few policy years and then steps up to a higher level premium that remains constant for life?

a.Single-premium whole life
b.Annual renewable term
c.Decreasing term
d.Modified whole life

Explanation

Modified whole life eases entry for younger buyers: premiums start below the eventual level for the first few years and then step up to a permanent higher level. The total cost of coverage is comparable to ordinary whole life.

Law Reference: Standard insurance principles

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