QuestionMay 22, 2025

Which of the following best describes annually renewable term insurance? A. It requires proof of insurability at each renewal. B. It is level term insurance. C. It provides an annually increasing death benefit. D. Neither the premium nor the death benefit is affected by the insured's age.

Which of the following best describes annually renewable term insurance? A. It requires proof of insurability at each renewal. B. It is level term insurance. C. It provides an annually increasing death benefit. D. Neither the premium nor the death benefit is affected by the insured's age.
Which of the following best describes annually renewable term insurance?
A. It requires proof of insurability at each renewal.
B. It is level term insurance.
C. It provides an annually increasing death benefit.
D. Neither the premium nor the death benefit is affected by the insured's
age.

Solution
3.9(318 votes)

Answer

None of the options correctly describe annually renewable term insurance. Explanation 1. Identify the characteristics of annually renewable term insurance Annually renewable term insurance typically has a premium that increases each year based on the insured's age, but the death benefit remains level. 2. Analyze each option A. Incorrect - Proof of insurability is not required at each renewal. B. Incorrect - Level term insurance refers to a fixed premium for a set period, not annually renewable. C. Incorrect - The death benefit does not increase annually; it remains level. D. Incorrect - Premiums are affected by the insured's age as they increase annually.

Explanation

1. Identify the characteristics of annually renewable term insurance<br /> Annually renewable term insurance typically has a premium that increases each year based on the insured's age, but the death benefit remains level.<br /><br />2. Analyze each option<br /> A. Incorrect - Proof of insurability is not required at each renewal.<br /> B. Incorrect - Level term insurance refers to a fixed premium for a set period, not annually renewable.<br /> C. Incorrect - The death benefit does not increase annually; it remains level.<br /> D. Incorrect - Premiums are affected by the insured's age as they increase annually.
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