What is typically the characteristic of graded premium whole life insurance?

Graded premium whole life insurance is characterized by premiums that gradually increase over time. This type of policy typically starts with lower premiums during the initial years of coverage, which then rise at set intervals until they reach a maximum level. This structure can make the insurance more affordable for policyholders in the early years, allowing them to secure life insurance protection while potentially managing their budgets more effectively. Eventually, the premiums stabilize and remain constant for the duration of the policy.

This gradual increase in premiums differentiates graded premium whole life insurance from options that feature level premiums, decreasing premiums, or single premium payments. Level premium policies require consistent payments throughout the life of the policy, while decreasing premiums result in lower costs over time and are not a typical feature of graded policies. Single premium payments involve a one-time upfront cost for the entire coverage period, which is also distinct from the graded structure.