Final answer:
A traditional level premium contract, such as the Straight Life policy, has a fixed premium throughout the duration of the policy.
Step-by-step explanation:
A traditional level premium contract is a life insurance policy where the premium remains constant throughout the duration of the policy. One example of a traditional level premium contract is the Straight Life policy. In this type of policy, the premium is fixed for the entire life of the policyholder, regardless of their age or any changes in their health condition. The death benefit is also fixed and is paid out to the beneficiary upon the policyholder's death.
For example, let's say a policyholder purchases a Straight Life policy with a $100,000 death benefit and a $1,000 annual premium. The premium remains at $1,000 per year, regardless of how long the policyholder lives. When the policyholder passes away, the insurance company pays out the $100,000 death benefit to the beneficiary.