Life Insurance FundamentalsQuestion 125 of 315
Sara purchases a 20-pay whole life policy at age 30. Which statement is correct?
a.Coverage ends 20 years after purchase
b.Premiums are paid for 20 years; coverage continues for the rest of her life
c.She pays no premium at all and the policy is self-funding
d.She must pay premiums until age 100
Explanation
Limited-pay whole life concentrates the lifetime cost of the policy into a shorter premium-paying period. With 20-pay whole life, Sara pays for 20 years and then the policy is paid up, but coverage continues for her entire life.
Law Reference: Standard insurance principlesPractice all 315 questions free — no signup required.
Related questions on this topic
- Which characteristic best distinguishes term life insurance from whole life insurance?
- A homeowner buys a 30-year policy where the premium stays level but the face amount declines each year along with the mortgage balance. This is best described as:
- What is the main advantage of the convertible feature in a term life policy?
- Under a Universal Life policy with Option A (Type I), how does the death benefit behave as cash value grows?
- Which best describes the death benefit under Universal Life Option B (Type II)?
- An agent wants to sell a variable universal life (VUL) policy. In addition to a California life license, what else is required?
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)