Question

An insured buys a 5-year level premium term policy with a face amount of $10,000. the policy also contains renewability and convertibility options. when the insured renews the policy in 5 years, what will happen to the premium

Answer 1

When the insured renews the policy in 5 years, the premium will increase. This is due to the fact that he/she will be 5 years older upon renewal.

The policy will retain its level during its term period, however, once a renewal is issued, the premium will be based on the insured new age.