Types of Policies
A parent needs a large fixed death benefit for the next 20 years and places no value on building cash value. Which product most directly fits?
Answer and explanation
Answer: D. Level term is designed to provide a fixed amount of protection for a stated period and generally does not build cash value. The other choices are cash-value life products or an annuity and do not match the temporary protection objective as directly.Source: NAIC — Life Insurance Buyer’s Guide — PDF page 5, Compare the Different Types of Insurance Policies > Term vs. Cash Value
More types of policies questions
- When is a second-to-die life policy’s death benefit triggered?
- Which combination of features defines a variable universal life (VUL) contract?
- Which combination of features most clearly signals variable universal life rather than ordinary whole life?
- Which description best distinguishes indexed universal life from variable universal life?
- Which description best matches a standard decreasing term life policy?
- Which feature is characteristic of a fixed deferred annuity?
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