Types of Policies
Compared with standard level term for the same face amount, how does return-of-premium term usually price the added refund feature?
Answer and explanation
Answer: A. Return-of-premium term generally costs more than comparable term insurance without the feature because the contract may return specified premiums if the insured survives the stated term.Source: New York State Department of Financial Services — Consumer Life Insurance FAQ — What is a Return of Premium feature?
More types of policies questions
- A renewable term policy states that renewal rights end at a specified age. The insured reaches that age and wants another term. Which statement is most accurate?
- A retiree hands an insurer a single premium and wants income payments to start about one month later. Which annuity fits?
- A retiree makes one annuity purchase payment and wants income payments to begin within the next year. Which classification applies?
- A return-of-premium term policy reaches the end of its stated term and the insured is alive. What does the policy pay and what happens to coverage?
- 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?
590 Texas questions like this one.
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