Chp4 Whole Life

This life insurance policy provides death protection for the insured's entire life, but premiums are not paid for the insured's entire life.

20-pay life

Which of the following is not true regarding the cash value in an ordinary whole life policy?

It may be used as a policy loan without affecting the death benefit.

A limited payment life insurance policy is best suited for:

Josh, a 25-year old successful entrepreneur with extra funds, who doesn't want to pay life insurance premiums when he retires.

Gina and Jerry are purchasing life insurance. They decided on policies that would be paid up in 20 years. What type of policies did they purchase?

Limited payment policies

What happens when the cash value of a life insurance policy equals the face value?

The policy endows.

All of the following are advantages of whole life insurance, EXCEPT:

The premium-paying period may extend beyond the income-earning years.

After looking at his options, Randy decided on a single premium whole life policy. What is the main advantage of this type of policy?

The total premium is lower.

Why are whole life policies more expensive than some other insurance options?

They must cover cash values, net insurance and mortality costs, as well as expenses.

Which type of life insurance provides living benefits?

Whole

All of the following are characteristics of whole life insurance, EXCEPT:

The cash value in a permanent life insurance policy is not a nonforfeiture benefit.