What type of policyholder would likely prefer Level Cost of Insurance (LCOI)?

A policyholder who prefers Level Cost of Insurance (LCOI) typically values predictability and stability in their budgeting for insurance costs. With LCOI, the cost of insurance remains constant over the life of the policy, which appeals to individuals who want to avoid fluctuations in premiums that could complicate financial planning. This consistency allows them to forecast their insurance expenditures without concern for sudden increases, which is especially beneficial for those prioritizing risk management.

By contrast, options that involve looking for the lowest premium or a preference for variable costs lean away from the stability that LCOI provides. Risk-averse individuals would not intentionally seek out variables or unpredictability in costs. Therefore, the choice of LCOI aligns perfectly with the desire for predictable costs, making it the preferred option for those who prioritize stability in their financial commitments.