Which method bases insurance premiums on the age of the insured when the term insurance was first acquired?

The choice that correctly identifies the method which bases insurance premiums on the age of the insured when the term insurance was first acquired is the Original-age method. This approach means that when the policy is written, the premiums are determined based on the age of the insured at the time of application, and this age remains fixed for the duration of the coverage, regardless of any subsequent changes in age.

In contrast, the Attained-age method adjusts premiums based on the current age of the policyholder at each renewal period. This method can result in increasing premiums as the insured ages, reflecting the increased risk of insurance coverage.

Yearly renewable term insurance typically involves premiums that may change from year to year, based on the insured's age each year, while Decreasing term life insurance has premiums that may decrease as the coverage amount decreases over time, often linked to a loan or mortgage.

Understanding the distinction between these methods is essential for evaluating how insurance products change in cost over time and how they reflect the underlying risk associated with the insured. The Original-age method, therefore, offers a stable premium based on the insured's age at the start of the policy, which can be beneficial if the policyholder is younger at the time of enrollment.