Which statement is true about Level Term life insurance?

• A. The death benefit remains level through the term
• B. The premium increases each year
• C. The policy has a cash value
• D. The term length increases with age

Answer: (A)

In Level Term life insurance, the amount the insurer pays when the insured dies stays the same for the entire term. That fixed death benefit is the defining feature of Level Term. Premiums are typically level for the term as well, meaning they don’t rise year to year during that period. Unlike permanent policies, a Level Term policy builds no cash value, so there’s nothing to borrow against. The term length is fixed at issue (for example, 10, 20, or 30 years) and does not increase with age; if you outlive the term, the coverage ends unless you renew or convert. So the statement that the death benefit remains level through the term is the true one.