Practice Quiz

Health and Life Insurance

Category - Annuities & Policies

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What is it called when an ordinary life policy has premium obligations redistributed so that they are lower during the first 3-5 years of the policy?
  1. Index-linked policies
  2. Graded premium plans
  3. Multiple protection
  4. Modified premium policy
Explanation
Answer: D - When an ordinary life policy has premium obligations redistributed so that the premiums are lower during the first 3-5 years it is called a modified premium policy. The modified premium policy is an ordinary life policy with premiums that are lower in the beginning and go up to be somewhat higher than an ordinary whole life policy.
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