Life Insurance FundamentalsQuestion 149 of 315
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.The premium increases each year based on the insured's attained age
c.The face amount declines each year and the premium stays level
d.Premiums are paid only once at issue and the coverage lasts for life
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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