What is typically true about life insurance premiums?

What is typically true about life insurance premiums?

• A. They are usually lower for older applicants
• B. They remain constant throughout the policyholder's life
• C. They may increase with age and health changes
• D. They are fixed and cannot be adjusted

Answer: (C)

Life insurance premiums are typically influenced by the age and health condition of the policyholder. As individuals age, the risk for insurers increases due to a higher probability of mortality, which is why premiums often increase with age. Additionally, if a policyholder experiences negative health changes, this can also prompt an increase in premiums, particularly in term life policies where renewals occur at the end of the term. In contrast, while some policies may offer level premiums that remain constant for a period, this is not universally true for all life insurance policies. Therefore, the notion that premiums may increase with age and health changes accurately captures the variability and the underwriting considerations that insurers take into account when determining premiums.

Life insurance premiums are typically influenced by the age and health condition of the policyholder. As individuals age, the risk for insurers increases due to a higher probability of mortality, which is why premiums often increase with age. Additionally, if a policyholder experiences negative health changes, this can also prompt an increase in premiums, particularly in term life policies where renewals occur at the end of the term.

In contrast, while some policies may offer level premiums that remain constant for a period, this is not universally true for all life insurance policies. Therefore, the notion that premiums may increase with age and health changes accurately captures the variability and the underwriting considerations that insurers take into account when determining premiums.