Difficulty: Easy

Average Score: 83%

All of the following are true about term life insurance policies EXCEPT the

Rationale

Face amount is paid if the insured survives to the end of the policy period.

Term life insurance policies provide coverage for a specified period, and the benefit is only payable upon the death of the insured during that term. If the insured survives the policy period, no benefit is paid, making this statement incorrect regarding the nature of term life insurance.

A (insured can choose the premium payment mode.) YOUR ANSWER

This statement is true as term life insurance policies typically allow the insured to select from various premium payment modes, such as monthly, quarterly, or annually, depending on their financial preferences and convenience.

B (insured must answer medical questions on the application.) YOUR ANSWER

This is also true; most term life insurance applications require the insured to answer medical questions to assess risk and determine eligibility and premium rates. This process helps the insurer evaluate the likelihood of a claim.

C (face amount is paid if the insured dies during the policy period.) YOUR ANSWER

This statement accurately reflects the fundamental principle of term life insurance. The face amount is indeed payable to the beneficiaries if the insured dies while the policy is active, which is the core function of term life coverage.

D (face amount is paid if the insured survives to the end of the policy period.) CORRECT

This statement is false. In a term life insurance policy, if the insured survives the policy period, there is no payout; the coverage simply ends without any benefit being disbursed, distinguishing it from whole or permanent life insurance policies.

Conclusion

Term life insurance is characterized by its provision of a death benefit only if the insured passes away during the coverage period, with no payout if they survive. The correct answer highlights the unique feature of term life policies, while the other options reflect true aspects of such plans, including premium payment flexibility, medical underwriting, and the triggering of benefits upon death. Understanding these key differences is crucial in selecting the appropriate insurance product.

Related Questions

View all