Life Term, Whole Life & Term to 100 question: 10-year term cost in total

LifeTerm, Whole Life & Term to 100

Rachel, 32, needs $500,000 of coverage for 20 years. A 10-year renewable term costs $40 a month now and, under its guaranteed renewal schedule, $115 a month for the second 10 years. A 20-year level term costs $62 a month. If she keeps either policy for the full 20 years, how much more will the 10-year term cost in total?

A $310
B $3,720
C $5,280
D $9,000

Show the answer and explanation

Answer: B. $3,720

10-year term: $40 × 120 + $115 × 120 = $4,800 + $13,800 = $18,600. 20-year term: $62 × 240 = $14,880. The difference is $3,720. $5,280 compares the 20-year term with the 10-year term's starting rate as if it never renewed, $9,000 counts only the renewal increase, and $310 is the average monthly difference rather than the total. The lower starting premium of renewable term is offset by the jump at renewal, which reflects her attained age. Source: CISRO LLQP Curriculum (May 2015; current as at 12 Oct 2026), Life component 2.1 (renewable and non-renewable term; advantages and limitations of term); arithmetic on the premiums stated in the stem (as at 12 Oct 2026).

Common mistake

Comparing only the starting premiums and forgetting the renewal increase.

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Original study material mapped to the public CISRO curriculum; not a real test question.Not affiliated with CISRO, CCIR or any provincial insurance regulator. Verify figures and rules against current guidance before relying on them.