Types of Policies
A policyowner surrenders a 20-year return-of-premium term policy in year 5 and expects the full end-of-term refund. What is the best response?
Answer and explanation
Answer: D. The return-of-premium feature is tied to surviving the specified term and the policy's own conditions. Early surrender does not automatically create the full end-of-term refund.Source: New York State Department of Financial Services — Consumer Life Insurance FAQ — What is a Return of Premium feature? — survive the specified term
More types of policies questions
- A term insured becomes uninsurable but wants permanent cash-value coverage during the policy’s conversion period. Which feature can meet that objective?
- A term insured dies during the coverage period, and the insurer pays the death benefit. Under the usual return of premium condition, what result follows at the end of that term?
- A term policyowner exercises a renewal provision after the original term ends. What premium change should the owner generally expect?
- A universal life policy’s cash value is no longer sufficient to cover current insurance costs, and the owner makes no additional payment. What is the principal policy risk?
- A variable universal life owner pays only minimal premiums while the selected separate-account options lose value. Monthly cost-of-insurance and expense deductions continue. What is the main near-term risk if the owner makes no change?
- A variable universal life policy keeps the same stated premium plan and mortality charge schedule, but the owner's selected stock subaccount falls sharply. Which policy element is directly changed first by that investment performance and can later affect whether charges can be paid?
590 Texas questions like this one.
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