The incidence of mortality shows that the risk of death generally increases with age. To match this risk increase, premiums should, in theory, increase at the same rate. As this would at some point make the cost prohibitive and unattractive, it has become the norm to calculate a premium that will remain level throughout the term of the contract. This effectively means 'overpaying' at the start of the contract, which will counterbalance the 'underpayment' later.
Premiums in the policy are locked in and will never increase until age 65.
Is a premium that remains unchanged while the policy is in force. ()
Premiums that remain the same each year that the life insurance policy is in force.
The company cannot raise the premiums due to age or medical condition. The company may raise the premium rates for an entire class of people with permission from the state insurance commission.
Premiums which remain the same over the life of the policy.
In long-term life assurance, as the probability of death rises with age it would be logical to charge a higher premium year by year, with steep increases in the later years of life. Instead, it is customary for the assurer, having calculated the death risk and allowed for the effect of interest on premiums, to express the sum required from the assured as a premium payable at the same rate annually throughout the years during which premiums are payable.
Premiums that are scheduled to remain the same each year for a specified duration. These may be guaranteed or non-guaranteed depending on the contract.
The uniform raising of premium rates for an entire class of insurance with permission from the state Insurance Commissioner.