Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
Under a level term life insurance policy, which statement is true?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Level term insurance provides a fixed face amount and a fixed (level) premium for the entire stated term, such as 10, 20, or 30 years. The predictability of the premium makes it popular for budgeted protection, and coverage is guaranteed for the term period. This distinguishes it from decreasing term, where the death benefit declines over time while the premium stays level, and from annual renewable term, where the premium rises each year as the insured ages. If the insured dies during the term, the full face amount is payable; if not, coverage simply expires at the end of the term.
Why the other options are wrong
- A) A decreasing face amount with a level premium describes decreasing term insurance, not level term.
- B) Rising premiums with level coverage describe annual renewable term, where the price increases with each renewal.
- D) There is no standard product in which both the face amount and premium decrease by equal annual amounts.
Memory hook
Level term = flat amount, flat premium, for the whole term.