Which of the following is the key characteristic of term life insurance quizlet?

Asked by: Prof. Reid Von Jr.  |  Last update: September 1, 2022
Score: 4.9/5 (38 votes)

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.

What characteristics does term insurance have?

Term insurance has two features that make it attractive:
  • A guarantee on the premium and survivor benefit for a defined amount of years, depending on the company, age of the insured, and other factors.
  • No capability of accumulating cash inside the policy. You can't pay an extra premium to get extra benefit.

What is term life insurance characterized by?

The most common, level term insurance, is characterized by level policy face amounts over the contract term period, usually 10, 20, or 30 years. The death benefit amount and policy amounts are usually guaranteed to remain level during this time, regardless of the insured's health status.

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 not a feature of a term life insurance policy?

Which of the following is not a feature of term life insurance? Term life insurance has no cash value and is often referred to as providing pure protection.

characteristics of term life insurance

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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.

What is basic term life insurance?

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 major feature of life insurance?

Pay-out on death or on maturity

Another one of the important features of life insurance is that the insurance service provider pays out the sum assured only under one of two incidents - upon the death of the policyholder or upon the maturity of the life insurance plan.

Which one of these is not a characteristic of insurance?

The functions of insurance are risk sharing, assisting in capital formation, economic progress, etc. Lending of funds is not a function of insurance.

Which of the following are characteristics of a universal life insurance policy?

Flexible Benefits, Payments and Terms

With whole life insurance, premiums are fixed, cash values and death benefits are guaranteed, and all the policyholder has to do is make the monthly premium payments. Universal life insurance is more complex than whole life insurance, but also more flexible for the policyholder.

What is meant by 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.

What is policy term in term insurance?

Policy term refers to the period for which your term insurance policy will remain active. This term is determined at the time of purchasing the insurance plan. It is used to refer to the period during which the life insured is provided guaranteed coverage by the insurer.

How does a term insurance work?

Term insurance is pure protection life insurance policy. It provides coverage for a defined period in exchange for a specified premium amount. In case of an unfortunate event during this time-frame, the insurer provides a guaranteed# payout. It compensates your nominee for the loss of your income.

What are the characteristics of life insurance?

Here are the main characteristics of term life insurance:
  • Temporary insurance protection.
  • Low cost.
  • No cash value.
  • Usually renewable.
  • Sometimes convertible to permanent life insurance.

What are the characteristics of life insurance contract?

Features of Life Insurance Contract
  • Nature of General Contract.
  • Insurable Interest.
  • Utmost Good Faith.
  • Warranties.
  • Proximate Cause.
  • Assignment and Nomination.

What are the basic characteristics of insurable risk?

There are ideally six characteristics of an insurable risk:
  • There must be a large number of exposure units.
  • The loss must be accidental and unintentional.
  • The loss must be determinable and measurable.
  • The loss should not be catastrophic.
  • The chance of loss must be calculable.
  • The premium must be economically feasible.

What are the key provisions in a life insurance policy?

Most states have laws requiring certain provisions to be included in life insurance policies and prohibiting the inclusion of other provisions. Examples of provisions commonly required by law are the free look, the grace period, the incontestability clause, and the reinstatement provision.

What are the main policies of life insurance?

What are the main types of life insurance policies in India?
  • Term Insurance.
  • Term insurance with return of premium.
  • Unit Linked Insurance Plans.
  • Endowment plans.
  • Moneyback policy.
  • Whole life insurance.
  • Group life insurance.
  • Child Insurance Plans.

What are the three basic functions of a life insurance company?

The three basic functions or the primary functions of insurance are as follow:
  • Insurance provides protection.
  • Insurance provides certainty.
  • Risk-Sharing.

What is the difference in term life and whole life insurance?

Two of the most common types of life insurance are term life vs. whole life. Both term life and whole life provide a death benefit for the beneficiaries you choose, but whole life is a type of permanent policy with a savings component, while term life is only in force for the period of time that you choose.

What is level term life insurance?

Level term life insurance is a policy that has a level death benefit the entire time you own it. Your beneficiaries will get paid the same amount regardless of whether you die in the third year or 23rd year of your 30-year policy.

What are the types of term insurance?

Types of term insurance
  • Level Term Plans. The default life insurance coverage provided by most insurers in India is a level term plan. ...
  • Increasing Term Insurance. ...
  • Decreasing term insurance. ...
  • Return of Premium Term Insurance. ...
  • Convertible Term Plans.

Why is a term plan important?

Term plan is the purest form of life insurance. It not just ensures your family's financial security, but also gives an option to protect them from critical illnesses such as cancer, heart diseases, etc. In life, we pass through several stages and each stage calls for different goals and plans.

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.

What happens at the end of term life insurance?

Generally, when term life insurance expires, the policy simply expires, and no action needs to be taken by the policyholder. A notice is sent by the insurance carrier that the policy is no longer in effect, the policyholder stops paying the premiums, and there is no longer any potential death benefit.