If a policyholder selects a longer premium payment period for a whole life policy, what is the typical effect on the premium amount?

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Study for the Louisiana Series 103 – Life, Health, and Accident or Sickness Insurance Exam. Familiarize yourself with key concepts through engaging questions and explanations. Prepare effectively for your exam!

Multiple Choice

If a policyholder selects a longer premium payment period for a whole life policy, what is the typical effect on the premium amount?

Explanation:
Spreading the cost over a longer period lowers the amount due each year. In a whole life policy, the death benefit and policy features stay the same, but you’re paying the same cost over more years, so the premium per year is reduced. (Be aware that total premiums paid over the life of the policy will typically be higher when you extend the payment period.)

Spreading the cost over a longer period lowers the amount due each year. In a whole life policy, the death benefit and policy features stay the same, but you’re paying the same cost over more years, so the premium per year is reduced. (Be aware that total premiums paid over the life of the policy will typically be higher when you extend the payment period.)

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