Life Insurance FundamentalsQuestion 122 of 315
Which characteristic best distinguishes term life insurance from whole life insurance?
a.Term insurance builds tax-deferred cash value
b.Term insurance provides coverage for a stated period with no cash value
c.Term insurance guarantees coverage to age 121
d.Term insurance allows the policyowner to take policy loans
Explanation
Term insurance is pure protection: it pays a death benefit only if the insured dies during the term and accumulates no cash value. Cash value, lifetime coverage, and policy loans are features of permanent products such as whole life.
Law Reference: Cal. Ins. Code §10113; standard insurance principlesPractice all 315 questions free — no signup required.
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