Life Insurance Policy Provisions, Options, and Riders
Why does a life income option pay a younger payee less each month than an older payee for the same proceeds?
Answer and explanation
Answer: B. The instalment reflects life expectancy: the same fund spread over a longer expected payment period yields less each month. The interest rate, the expense charge and the choice of a guarantee are not what drives the difference by age.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, life income and mortality
More life insurance policy provisions, options, and riders questions
- Which description best identifies the coverage supplied by a term rider?
- Which need does the fixed-amount option meet better than the fixed-period option?
- Which owner is the reduction of premium dividend option best suited to?
- Which owner would the one-year term dividend option suit?
- Which three nonforfeiture options does a permanent policy customarily make available?
- Who exercises the rights a New York life policy confers, where the owner is not the insured?
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