What Happens to the Premiums for Yearly Renewable Term Insurance

question 19

Multiple Choice

What happens to the premiums for yearly renewable term insurance as an insured gets older?

• A)They increase at an increasing rate.
• B)They increase at a decreasing rate.
• C)They decrease at a constant rate.
• D)They remain level.

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Definitions:

Utility Function

Describes how different combinations of goods or outcomes are valued by an individual, helping to predict choice under uncertainty.

Income

The financial gain or revenue received by an individual or entity, typically through wages, investments, or business operations.

Prices

The amount of money expected, required, or given in exchange for goods or services.

Marginal Rate

The rate of change in cost or benefit resulting from a particular increase in volume or activity.