Types of Policies
A one-year renewable term policy states that renewal rights end at age 70. The insured renews at age 69 and reaches 70 during that term. What should the producer explain?
Answer and explanation
Answer: B. A renewable term contract can end its renewal privilege at a stated age. The current term remains governed by the policy, but another renewal is not guaranteed beyond that limit.Source: National Association of Insurance Commissioners — Life Insurance Buyer's Guide — PDF page 5, Renewable Term — possible loss of renewal right at a stated age
More types of policies questions
- An annuitant wants lifetime income but also wants payments guaranteed for at least 15 years if death occurs early. Which payout basis addresses both goals?
- An annuity buyer wants to select investment subaccounts and accepts that poor performance could reduce contract value below contributions. Which annuity is the direct match?
- An annuity owner wants income payments for as long as the owner lives, without adding a spouse or a minimum payment period. Which payout basis matches that request?
- An equity-indexed policy has an 80% participation rate and a 10% cap. If the underlying index grows by 15% in a policy year, what interest rate is credited?
- An indexed universal life policy's referenced index has a negative result for the crediting period. Which contract feature should the owner examine to determine the lowest credited rate?
- 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?
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