Life Insurance FundamentalsQuestion 149 of 716
Which feature of an Annual Renewable Term (ART) policy makes it different from a level term policy?
a.Both the premium and the face amount stay constant for the contract life
b.Premiums are paid only once at issue and the coverage lasts for life
c.The face amount declines each year and the premium stays level
d.The premium increases each year based on the insured's attained age
Explanation
ART is renewed each year without new evidence of insurability, but at a new premium that reflects the insured's higher attained age. Level term, by contrast, locks in both the face amount and the premium for the entire term.
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Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)