Life · Chapter 6 · Premiums
Premium Funding Methods
Definition
Single = one lump sum. Fixed/Level = spread evenly (overpay early to offset later costs). Modified = lower for a set period, then ONE step up, constant after. Graded = increases annually for a period, then stable. Flexible = owner adjusts payments (UL).
Exam tip
Modified = one jump; Graded = yearly increases — the same contrast as modified vs graded whole life.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms