The method of paying premium in life insurance contract in which premium payable increases as age increases is?
Answer Details
The method of paying premium in a life insurance contract in which the premium payable increases as the age of the policyholder increases is called "natural premium."
Under this method, the premium is calculated based on the risk of death associated with the policyholder's age. As the policyholder gets older, the risk of death increases, and therefore, the premium payable also increases.
This method is also known as the "age-premium" method and is commonly used in term life insurance policies. The natural premium method ensures that the premium payable by the policyholder remains affordable while still providing adequate coverage. It is also considered a fair method of premium calculation as the premium is based on the policyholder's actual age and risk of death.