What defines level term assurance?

Level term assurance is a type of life insurance that provides a fixed sum assured in the event of the policyholder's death during the specified term of the policy. This means that the amount payable to the beneficiaries remains constant throughout the duration of the policy. The known payment on death ensures financial security for the dependents, as they will receive the same guaranteed amount regardless of when the death occurs within the policy term, as long as the policy is in force when the event happens.

In contrast, the other options do not align with the characteristics of level term assurance. A declining payment on maturity would describe a different product where the benefit decreases over time, which is not applicable here. An increasing premium with age contradicts the nature of level term assurance, as the premiums typically stay level for the duration of the policy to provide stability in its costs. Lastly, a fluctuating sum assured based on investment performance refers to investment-linked or unit-linked policies, which also do not fit the definition of level term assurance.