Life Insurance Policies
What happens under a whole life policy if the insured lives to the contract's maturity age?
Answer and explanation
Answer: D. Whole life is built so that the reserve equals the face amount at the stated maturity age, at which point the sum is paid to the insured. It does not simply lapse, and any annuity settlement would be an election rather than an automatic conversion.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, whole life maturity
More life insurance policies questions
- A twenty year level premium term policy reaches its twentieth anniversary and the insured wants to keep the cover. What usually happens to the premium?
- A universal life owner wants to vary the timing and amount of premium payments. Which condition remains essential?
- 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?
- An annual renewable term policy keeps the same death benefit for each one-year term. What normally happens to its premium from year to year?
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