Difficulty: Hard

Average Score: 41%

Which of the following is NOT ordinary life insurance?

Rationale

A 20-year endowment life policy is NOT ordinary life insurance.

A 20-year endowment life policy is considered a form of endowment insurance, which pays out a sum either upon death or if the insured survives until the end of the term. This type of policy differs from ordinary life insurance, which typically provides coverage only upon the insured's death without a maturity benefit.

A (A group term life insurance policy.) YOUR ANSWER

Group term life insurance is a type of ordinary life insurance that provides coverage to a group of people, typically employees of a company, for a limited term. It is usually renewable and provides a death benefit to the beneficiaries if the insured passes away during the policy term, aligning with the common characteristics of ordinary life insurance.

C (A life paid-up-at-age-85 policy.) YOUR ANSWER

A life paid-up-at-age-85 policy is a type of whole life insurance that provides coverage for the insured's entire life, with premiums paid until the age of 85. This policy fits within the definition of ordinary life insurance, as it offers lifelong protection and a guaranteed death benefit.

D (A participating whole life policy.) YOUR ANSWER

A participating whole life policy is a standard form of ordinary life insurance that not only provides a death benefit but also allows policyholders to receive dividends. This feature is characteristic of whole life insurance, which is designed to offer lifelong coverage rather than a specific term, confirming its classification as ordinary life insurance.

Conclusion

Ordinary life insurance encompasses policies that provide a death benefit, typically for the insured's lifetime or a specified term. While options A, C, and D represent standard forms of life insurance, the 20-year endowment life policy stands apart due to its dual payout structure, thus classifying it as a different type of insurance product. Understanding these distinctions is crucial for consumers when selecting appropriate life insurance coverage.

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