Life License Qualification Program (LLQP) Practice Exam

Which type of policy guarantees a death benefit that remains constant throughout the term?

1. Level term policy

2. Decreasing term policy

3. Whole life policy

4. Universal life policy

The correct answer is: Level term policy

A level term policy is designed specifically to provide a death benefit that remains constant for the duration of the policy term. This means that the amount paid out to beneficiaries in the event of the insured's death does not change over time, making it a predictable and straightforward option for individuals seeking to ensure a specific financial amount is available to their loved ones. In contrast, a decreasing term policy features a death benefit that declines over time, typically aligning with responsibilities like a mortgage that may diminish as payments are made. A whole life policy, while offering a guaranteed death benefit, also accumulates cash value and has a different structure that includes premiums paid over the insured's lifetime. A universal life policy offers flexibility in premium payments and death benefits, which can change based on the policyholder's choices, but it does not guarantee a constant death benefit. Therefore, a level term policy is the best choice for those looking for a constant death benefit throughout the policy term.