Types of Policies
A homeowner wants life coverage designed to decline roughly as a repayment mortgage balance declines. Which type is most directly suited to that pattern?
Answer and explanation
Answer: C. Decreasing term provides a death benefit that falls over time and is commonly used for obligations such as a declining mortgage. Level term keeps the benefit fixed, while whole and variable life are permanent cash-value products.Source: NAIC — Life Insurance — Term Life Insurance > Decreasing term insurance
More types of policies questions
- A 20-year level term policy allows conversion only during the first 10 policy years and renewal only until age 65. In policy year 9 the insured wants permanent coverage without risking later evidence-of-insurability problems. Which advice best protects the contractual right?
- A 20-year term policy allows conversion only during its first 12 years. What happens to the conversion privilege after year 12?
- A 20-year term policy permits conversion only during its first 12 years. Which statement correctly describes the feature?
- A 45-year-old buys an annuity intending to take income at 65. Which annuity classification describes the contract during those twenty years?
- A buyer wants a deferred annuity funded entirely with one lump-sum purchase payment. Which funding form should be selected?
- A buyer wants lifetime life insurance funded by one lump-sum payment and wants cash value available immediately. Which policy fits?
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