Which term describes the basic form of whole life, also called ordinary life or continuous premium?

Which term describes the basic form of whole life, also called ordinary life or continuous premium?

• A. Cash value
• B. Living benefit
• C. Death benefit
• D. Level premium

Answer: (B)

The main idea here is the premium structure of whole life insurance. The basic form keeps the same payment amount every year for as long as the policy is in force, which is why it’s described as level premium. This arrangement is also known as ordinary life or continuous premium because you continue paying a fixed amount throughout the insured’s life, while the policy provides lifetime coverage and builds cash value. Cash value refers to the savings inside the policy, but it doesn’t define how premiums are paid. The death benefit is the amount paid upon death, and living benefits are features that might allow access to funds while you’re alive—these don’t describe the premium pattern. So, the correct concept is level premium.

The main idea here is the premium structure of whole life insurance. The basic form keeps the same payment amount every year for as long as the policy is in force, which is why it’s described as level premium. This arrangement is also known as ordinary life or continuous premium because you continue paying a fixed amount throughout the insured’s life, while the policy provides lifetime coverage and builds cash value. Cash value refers to the savings inside the policy, but it doesn’t define how premiums are paid. The death benefit is the amount paid upon death, and living benefits are features that might allow access to funds while you’re alive—these don’t describe the premium pattern. So, the correct concept is level premium.