Types of Policies
A term policyowner exercises a renewal provision after the original term ends. What premium change should the owner generally expect?
Answer and explanation
Answer: A. Renewable term commonly allows continuation despite changed health, but the renewal premium is generally higher. Term coverage ordinarily has no cash value to fund premiums, and renewal does not itself waive or refund premiums.Source: NAIC — Life Insurance Buyer’s Guide — PDF page 5, Renewable Term vs. Nonrenewable Term
More types of policies questions
- Two business owners need one life policy to provide funds when the first of them dies. Which policy trigger is required?
- Two business partners purchase a joint life policy to fund a buy-sell agreement. Partner A dies. What happens to the policy after the death benefit is paid?
- Under a fixed indexed annuity’s basic index-crediting structure, what interest is added for an index term with a negative result?
- Under IRC § 7702 corridor rules, what must an insurer do if cash value growth in a universal life policy threatens to breach the statutory life insurance definition ratio?
- What benchmark rate is used in variable annuity payout calculations to determine whether monthly annuity payment amounts increase or decrease?
- What benefit does a joint and survivor annuity payout option provide to two annuitants (such as a married couple)?
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