A whole life policy payment period is related to an annual premium in which of...

In a whole life insurance policy, thepayment periodrefers to the duration over which premiums are paid (e.g., until age 100, or a limited period like 20 years). A shorter payment period (e.g., 10-pay or 20-pay whole life) requires higher annual premiums because the total cost of the policy is compressed into fewer payments, while a longer payment period (e.g., until age 100) spreads the cost, resulting in lower annual premiums.

Option A: Incorrect. The payment period directly affects the annual premium amount.

Option B: Incorrect. A shorter payment period increases, not decreases, the annual premium.

Option C: Correct. A shorter payment period results in a higher annual premium due to the condensed payment schedule.

Option D: Incorrect. A longer payment period typically lowers the annual premium, not increases it.

This question aligns with the Prometric content outline under “Life Products,” which covers whole life insurance premium structures.