Life Insurance Policies
Why is the annual premium for continuous premium whole life lower than for limited payment whole life at the same age and face amount?
Answer and explanation
Answer: C. Both forms fund the same lifetime obligation, so paying over more years produces a smaller annual amount. The death benefit and the accumulation of value are comparable, and underwriting is the same.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, continuous premium whole life
More life insurance policies questions
- 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?
- An eligible employee declines the contributory plan at first, then applies to join two years later. What may the insurer require?
621 New York questions like this one.
Every answer explained, the ones you miss come back on a spaced schedule, and a plan built from your exam date.