If a term policy is a level death benefit policy, what does that imply?

• A. The death benefit increases over time.
• B. The death benefit decreases over time.
• C. The death benefit depends on market performance.
• D. The death benefit remains constant throughout the term.

Answer: (D)

The key idea is that a level death benefit stays the same throughout the entire term. In a term life policy with a level death benefit, the amount paid out if the insured dies during the term is a fixed face value, no matter when within the term death occurs. This means the benefit doesn’t rise or fall over time. Premiums are typically level as well, but the important part here is that the payout amount remains constant. If the policy were a decreasing term, the death benefit would decline over time; if it were increasing or tied to market performance, the payout would change in other ways.