A whole life policy is issued with premiums that start lower than the level whole life premium and increase each year for a stated number of years, after which they remain level for the rest of the insured's life. This product is best described as:

Why A is correct

Graded premium whole life (also called modified premium whole life) charges lower premiums in the early years, with the premium increasing each year for a defined period (commonly five to ten years), then leveling off at a higher rate for the insured's lifetime. It keeps the permanent, level-death-benefit features of whole life while reducing early-year premium outlay for applicants who expect income to grow. It is not a term product.

Why the other options are wrong

• B) A single premium policy is fully paid with one lump sum and requires no ongoing premiums, which is not described here.
• C) Level term provides protection for a specified term only and builds no cash value; the described policy is permanent.
• D) Renewable term allows the coverage to be continued at the end of a term without evidence of insurability, but it remains term insurance.

Memory hook

Graded premium = the policy's premiums climb a staircase, then stay flat. Permanent coverage with a cheaper first step.