Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
A term policy in which the premium and the death benefit remain unchanged throughout the coverage period, such as a 20-year term policy, is called:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Level term insurance keeps both the death benefit and the premium level for the entire term (for example, 10, 20, or 30 years). The premium is averaged over the term rather than rising each year with age. Level term is the most common form of term insurance sold today, often used to cover a mortgage period or a child's college years.
Why the other options are wrong
- B) Increasing term insurance has a death benefit that rises over time; level term's benefit is constant.
- C) Decreasing term insurance has a level premium but a death benefit that declines over the term, as with mortgage protection.
- D) Annual renewable term's premium rises each year as the insured ages while the benefit stays level; the premium is not level for the whole period.
Memory hook
Level term = same price and same payout every year of the term. Set it and forget it.