Which statement about Increasing Term insurance is true?

Which statement about Increasing Term insurance is true?

• A. The death benefit increases over the life of the policy while the premiums remain level.
• B. Premiums increase each year while the death benefit remains level.
• C. Both premiums and death benefit remain level.
• D. The death benefit stays level as premiums decrease.

Answer: (C)

Increasing term life insurance is defined by one key feature: the death benefit grows over the term while the premium stays the same. This means you pay a fixed premium for the duration of the policy, but the amount that would be paid out to your beneficiaries increases at scheduled times or by a stated rule. This structure matches situations where your needs rise over time—like increasing financial obligations or long-term dependents—so you get more coverage without paying more each year. The other patterns don’t fit increasing term. If the premium were to rise each year while the benefit stays level, that describes a policy where cost goes up but coverage doesn’t change. If both premiums and the death benefit stay level, that’s a level term policy. If the death benefit stays level as premiums decrease, that’s not how standard term designs work.

Increasing term life insurance is defined by one key feature: the death benefit grows over the term while the premium stays the same. This means you pay a fixed premium for the duration of the policy, but the amount that would be paid out to your beneficiaries increases at scheduled times or by a stated rule. This structure matches situations where your needs rise over time—like increasing financial obligations or long-term dependents—so you get more coverage without paying more each year.

The other patterns don’t fit increasing term. If the premium were to rise each year while the benefit stays level, that describes a policy where cost goes up but coverage doesn’t change. If both premiums and the death benefit stay level, that’s a level term policy. If the death benefit stays level as premiums decrease, that’s not how standard term designs work.