Which of the following best describes the term life insurance
A. The insured pays the premium until his or her death.
B. The insured pays a premium for a specified number of years.
C. The insured can borrow or collect the cash value of the policy.
D. The insured is covered during his or her entire lifetime.
Answer: B. The insured pays a premium for a specified number of years.
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What is Term Life Insurance?
Term life insurance is a type of life insurance that offers coverage for a set period of time. The “term” can be as little as one year or as long as 30 years, depending on the product. This type of policy doesn’t accumulate cash value, so it’s typically less expensive than other types of policies.
What are the benefits of Term Life Insurance?
Term life insurance covers term-certain coverage that can be customized to fit your needs. You can choose the length of time you need coverage, anywhere from 10 to 30 years or an entire lifetime. Your term policy will renew automatically at the end unless you cancel it or convert it to a permanent policy.
- Infinite Flexibility
- Premiums remain level for the life of the policy
- No extra costs due to bad health, age, or lifestyle choices
- Coverage options can be added at any time
What are the benefits of Permanent Life Insurance?
The permanent life insurance policy covers lifetime coverage that cannot be canceled, even if you become sick or injured. These policies usually have lower premiums and higher benefits, so you’ll pay less for more coverage. The cash value account in a life insurance policy can be used as collateral if you need to borrow money or receive a loan from the insurance company at a reduced interest rate.
Whole life and universal life are types of permanent life insurance. Whole life is a type of permanent insurance that builds cash value. Universal life provides the flexibility to change premium payments, investment allocation, and how much death benefit you want to cover
