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Demo INSCE028FL15 -Life CE: Topic 1 - Lesson 1: Level Premium - 17/27 | OLT

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Topic 1 - Lesson 1

Level Premium - 17/27

T1-L1-P17

Level Premium

Term insurance of a longer term than 1 year has to have a level premium that overpays the cost of dying in the early years. This excess payment, plus interest earned is enough to compensate for higher mortality charges later.

The concept of level premium is used in the whole life insurance as well, except it is level for as long as the payer elects to pay premiums or until the insured dies.

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