Which of the following is not true about term life insurance?
Asked by: Andrew Jast III | Last update: June 12, 2023Score: 5/5 (25 votes)
Which of the following is not true about term insurance? Term insurance does NOT build any cash value. While age is not the only consideration, premiums are generally lower for younger insureds. The correct answer is: Term insurance builds cash value.
What is not a characteristic of term life insurance?
All of the following are characteristics of term insurance, EXCEPT: Term policies do not accrue cash value. They only provide death protection. Premiums increase as the policy is renewed, and the death benefit is only paid out if the insured dies during the policy term.
What is a term life insurance policy?
A term life insurance policy is the simplest, purest form of life insurance: You pay a premium for a period of time – typically between 10 and 30 years – and if you die during that time a cash benefit is paid to your family (or anyone else you name as your beneficiary).
Which of the following is the key characteristic of term life insurance quizlet?
Term life insurance provides pure death protection (pays a death benefit only). Whole life insurance (permanent protection) provides life insurance for the entire life of the insured. It also is said to provide a living benefit because it accrues cash value, which is available to the policy owner.
What is a characteristic of term life insurance?
Here are the main characteristics of term life insurance: Temporary insurance protection. Low cost. No cash value. Usually renewable.
What Kind Of Term Life Insurance Do I Need (Find Out Right Now)
What are the benefits of term life insurance?
Term life insurance offers temporary financial protection — usually five to 30 years — for a low, fixed cost. This type of life insurance is best for meeting short-term financial needs, like paying off debts, replacing your income, covering childcare costs and funding your child's education.
Which of the following best describes term life insurance?
Correct option is (B) The insured pays a premium for a specified number of years. The following best describes term life insurance: The insured pays a premium for a specified number of years.
Which of the following is not a feature of term life insurance quizlet?
Which of the following is not a feature of term life insurance? Cash Value is not a feature of term life insurance. A "level term" policy means that the _________ remains the same throughout the entire policy period. A producer is explaining the concept of limited-pay life insurance to a 40-year-old client.
Which of the following is a downside of term life insurance quizlet?
Disadvantages of term insurance are: premiums that increase and become unaffordable in later years. the need for coverage may exist after the policy expires. no cash value accumulates during the policy period.
Which of the following is not a true characteristic of permanent protection whole life?
Which of the following is not a true characteristic of permanent protection Whole Life? Flexible premiums are not a characteristic of a Whole Life Insurance Policy. A decreasing term policy has a death benefit that reduces over a defined number of years, but the premium remains the same in all years.
What is the meaning of term insurance?
Term insurance is the simplest and purest form of life insurance. It provides financial protection to your family at the most affordable rates. With term insurance, you can get a large amount of life cover (i.e. sum assured) at a relatively low premium rate.
Does term life insurance expire?
Yes. Term life insurance expires at the end of the contracted term, which is determined when you purchase the policy. Plans typically range from five to 30 years and issued in five-year increments, although yearly renewable term plans expire at the end of their yearly term if not renewed.
Which of the following is not a life insurance plans?
Answer: Indemnity contract is not applicable in life insurance contract. Among the given options option (c) Indemnity contract is the correct answer.
Does term life insurance premium increase with age?
Typically, the premium amount increases, on average, about 8% to 10% for every year of age; it can be as low as 5% annually if your 40s, and as high as 12% annually if you're over age 50. With term life insurance, your premium is established when you buy a policy and remains the same every year.
Why is term life insurance better than whole life insurance?
Key Takeaways. Term life is “pure” insurance, whereas whole life adds a cash value component that you can tap during your lifetime. Term coverage only protects you for a limited number of years, while whole life provides lifelong protection—if you can keep up with the premium payments.
What would be considered an advantage of purchasing term life insurance quizlet?
Provides low cost insurance protection for a specific period (or term) and pays a benefit only if the insured dies during that period.
Which of the following is not one of the three objectives of planning for the later years of life insurance?
Which of the following is NOT one of the three objectives of planning for the later years of life insurance? D Retirement Objective Correct!
What is term life insurance describe some common types of term life insurance policies quizlet?
Term life insurance is the most basic form of life insurance. Term life insurance provides temporary protection for a specified, limited time that can be defined in years or by the age of the insured. If the insured dies during the term of coverage, then the policy's death benefit is paid.
Which of the following is true of a term rider when attached to a permanent life policy?
Which of the following is TRUE of a term rider when attached to a permanent life policy? REASON; A term rider provides additional death benefit on the primary insured or other named insureds.
What is whole life insurance What benefit does it provide that term insurance does not quizlet?
What benefits does it provide that term life insurance does not? Whole life insurance (permanent insurance) that continues to provide insurance as long as premiums are paid and builds cash value.
Which of the following is not a benefit of insurance?
Insurance is a means of protection from financial loss. It is a form of risk management primarily hedged against any uncertain future loss. The functions of insurance are risk sharing, assisting in capital formation, economic progress, etc. Lending of funds is not a function of insurance.
What is Direct term life insurance?
Direct term is a kind of term life insurance policy, which covers you for a specific length of time (usually 10 to 30 years). If you die while the policy is active, your family receives a cash payout based on your coverage amount that they can use to cover any short- or long-term financial needs.
Which statement best defines the term premium?
Which statement best defines the term premium? It is a fee paid to an insurance company to purchase coverage.