South Carolina Life and Health Practice Exam

When Krissa purchases a 10-year level term life insurance policy, what remains constant throughout the period?

1. The face amount and premium

2. The death benefit only

3. The premium and coverage terms

4. The premium amount only

The correct answer is: The face amount and premium

In a 10-year level term life insurance policy, both the face amount and the premium remain constant throughout the policy's term. The face amount refers to the death benefit that will be paid to the beneficiaries if the insured passes away during that ten-year period. This amount does not change, providing certainty for both the policyholder and the beneficiaries regarding the financial protection in place. Similarly, the premium—the payment made by the policyholder to maintain the policy—also remains unchanged during the term. This predictability in cost allows the policyholder to budget accordingly without worrying about increasing premiums over the years covered by the policy. The combination of a constant face amount and premium is a key characteristic of level term life insurance, making it an attractive option for individuals seeking stable coverage for a specified period.