Final answer:
An accurate description of the premium in a graded premium life insurance policy is that it involves annual increases for a certain number of years, followed by level premiums for the remainder of the contract.
Step-by-step explanation:
The accurate description of the premium in a graded premium life insurance policy. The correct answer is D. Annual increases in premium for a stated number of years then remains level. This means that the policyholder will pay premiums that increase annually for a specified period at the start of the policy, and after that period, the premium will stay the same (level) for the remainder of the contract.
To further explain, a graded premium life insurance is designed to help the policyholder by offering lower initial premiums that increase over time and then level off. The purpose of this structure is to make life insurance more affordable when the policyholder is younger and potentially less able to afford higher premiums. Over time, as the policyholder's income may increase, the premiums increase accordingly, and eventually, they stabilize, providing predictable costs for the policyholder.