Types of Policies
A client wants permanent life insurance but wants all required premiums completed within 20 years. Which policy best matches that goal?
Answer and explanation
Answer: B. Limited-payment whole life compresses premium payments into a shorter period while the coverage is designed to last for life. The term choices provide temporary protection, and an annuity is not life insurance protection on the client’s life.Source: NAIC — Life Insurance — Whole Life Insurance > Types of whole life insurance > Limited payment whole life insurance
More types of policies questions
- An individual purchases a life insurance policy that provides coverage for exactly one year. At the end of the year, the policyowner can renew the coverage without proving insurability, but the premium will increase based on their attained age. What type of policy is this?
- An insured buys convertible term at age 30 and converts it to permanent insurance at age 40. Which age generally determines the new premium?
- An insured develops a health condition halfway through a 20-year level term policy. What happens to the fixed death benefit and premium specified for that term?
- An insured outlives a return-of-premium term policy, and no death benefit was paid. What feature may then apply according to the contract?
- An insured’s health deteriorates during a renewable term policy. At the end of the term, which feature is most valuable?
- An insured's health worsens before a renewable term policy expires. The renewal right is still available. Which outcome best reflects that feature?
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