What does the graded premium structure typically aim to address?

The graded premium structure is designed to provide an affordable way for individuals, particularly those classified as high-risk, to obtain life insurance coverage at initially lower rates. This structure allows the insured to start with a premium that is lower than standard rates, which gradually increases over time. This approach makes it easier for high-risk individuals to enter the insurance market without facing prohibitively high costs from the outset. By offering lower premiums initially, it encourages these applicants to secure coverage that they might otherwise find unaffordable due to their risk profile.

The other options do not accurately reflect the primary goal of the graded premium structure. While increasing coverage amounts over time, determining the duration of a policy, or offering a premium-free period are important concepts in life insurance, they do not represent the main aim of graded premiums, which is specifically to facilitate coverage for those deemed high-risk at more manageable initial costs.