What is a defining feature of Level Term life insurance?

• A. The premium and death benefit remain level during the term of coverage, and the policy is annually renewable.
• B. The premium increases with each renewal, while the death benefit remains level.
• C. The death benefit is paid only if the insured dies within the first year.
• D. The policy cannot be renewed after the initial term.

Answer: (A)

Level Term life insurance provides fixed protection for a set period. The premium you pay stays level for the term, and the death benefit remains the same amount if the insured dies during that term. At the end of the term, you usually have the option to renew the policy (often annually) without showing more medical evidence, though the new premium reflects the insured’s age. This combination of a level premium and a level death benefit for the term, along with renewability, is what makes Level Term distinctive. If the premium were to rise during the term or the death benefit changed, it wouldn’t be Level Term. Likewise, coverage that ends with no renewal option or that pays only in the first year wouldn’t fit this type of policy.