Life Insurance Policies
Why is the annual premium of a twenty payment whole life policy higher than that of continuous premium whole life?
Answer and explanation
Answer: A. Compressing the funding into twenty years raises each payment, and the cash value therefore builds faster as well. The benefit, the riders and the issue ages are not what differ.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, limited payment whole life
More life insurance policies questions
- A 20-year term policy permits conversion only during its first 12 years. Which statement correctly describes the feature?
- A client has a lump sum from an inheritance and wants to leave the largest possible sum to heirs, with no further payments.
- A client holds employer-provided level term cover and asks whether personal term insurance is still needed.
- A client wants cover that will still be in force at age ninety and a value that can be reached in the meantime. Which is indicated?
- A client wants flexible premiums and an adjustable death benefit, but also wants to place policy value in equity and bond portfolios and accepts that those values can rise or fall with market performance. Which explanation best distinguishes the product from non-variable universal life?
- A convertible term policy says conversion is available only under the policy's stated conversion provision. The owner asks for permanent coverage beyond the policy's allowed conversion amount without underwriting. What is the best response?
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