Life Insurance Basics
An owner paying annually dies four months into the policy year. What happens to the unearned part of that premium?
Answer and explanation
Answer: C. Life policies provide for the return of premium paid beyond the month or period of death, so the unearned portion is added to the claim payment. It is neither kept by the insurer nor treated as an increase in the face amount.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, mode of premium
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