Types of Policies
Why is the premium for a $1,000,000 survivorship life policy lower than for a $1,000,000 joint first-to-die policy on the same two lives?
Answer and explanation
Answer: B. The combined joint life expectancy to the second death is longer, reducing the annual cost of insurance.Source: NAIC Life Insurance Guide — PDF page 6, Survivorship Pricing
More types of policies questions
- 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?
- A term policyowner exercises a renewal provision after the original term ends. What premium change should the owner generally expect?
- 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?
590 Texas questions like this one.
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