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If the insurance element gets more expensive every year, why does the premium stay level?

April 26, 2017element expensive Insurance level Premium stay year

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If the insurance element gets more expensive every year, why does the premium stay level?

1 Answer

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Premiums do not increase because the insurance company sets the gross premium at a level to cover mortality and expense costs while allowing the cash value to grow until it endows. One of the results of a rising cash value is a reduction of the insurance element over time.