Rhode Island Life & Health Insurance Pre-Licensing Practice Test 2026

Question: 1 / 420

Under a Renewable Term policy, how is the renewal premium calculated?

Based on the original age at issue

Based on the insured's current health status

Based on the insured's attained age

In the case of a Renewable Term policy, the renewal premium is calculated based on the insured's attained age. This means that when the policyholder decides to renew the coverage, the premium will be determined by the age they are at the time of renewal, rather than the age they were when the policy was originally issued. As insured individuals age, they often become more of a risk to the insurance company, which justifies the increase in premium costs over time.

Attained age premiums take into account factors such as increased mortality risk as a person grows older. This standard practice in insurance ensures that premiums remain actuarially sound, reflecting the current risk levels associated with insuring that individual at their new age. The methodology allows for ongoing coverage while managing the risk profile accordingly.

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Fixed for the life of the policy

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