Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
Which characteristic best describes a level term life insurance policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A level term policy provides a constant death benefit and a level premium for the entire term, such as 10, 20, or 30 years. The premiums are averaged over the term so the insured pays a uniform amount rather than yearly increasing rates. Because term insurance has no savings element, it builds no cash value. Decreasing term reduces the death benefit over time, and yearly renewable term raises premiums each year. Level term is popular when the need is for a fixed period of coverage at a predictable cost.
Why the other options are wrong
- B) A decreasing benefit with level premiums describes decreasing term insurance, not level term.
- C) Premiums increasing each year describe yearly renewable term insurance, not level term.
- D) Term insurance provides pure death protection with no cash value; cash value is a permanent-policy feature.
Memory hook
Level term = flat coverage, flat price, fixed years, zero cash value.