Mark is the owner of a permanent life insurance policy where he is both the owner and life insured. He has named his daughter Claire as the revocable beneficiary. The policy also has a face value of $400,000 and will charge him a $125 level premium per month throughout the rest of his life. The concept of a level premium: Question 25 options:

Applies only to term insurance not permanent insurance policies

Compares both the mortality and morbidity costs associated with the applicant and charges a premium that does not change throughout the life of the policy

Allocates a higher percentage of the mortality costs in the early stages of the policy and then a lower percentage of the premium in the latter stages of the policy

Allows consumers the option of maintaining affordable insurance protection in later years without incurring the actual mortality charges associated with those years, which can be quite significant