Life Insurance FundamentalsQuestion 150 of 315
Which of the following BEST illustrates 'return-of-premium term' insurance?
a.Premiums become tax-deductible at the end of the term
b.Premiums are waived during a disability of the insured
c.If the insured outlives the term, the insurer returns the premiums paid
d.Premiums are refunded any time the policyowner surrenders the contract
Explanation
Return-of-premium (ROP) term promises to refund the cumulative premiums paid if the insured survives the entire term. Premiums are higher than ordinary term because of this living benefit. The death benefit during the term is the same as standard level term.
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Related questions on this topic
- Which of the following is a category in which insurable interest in another person's life is generally recognized?
- When the insurer assumes a higher rate of interest will be earned on policy reserves, the effect on the gross premium is generally:
- Which feature of an Annual Renewable Term (ART) policy makes it different from a level term policy?
- An applicant is found to be in such poor health and high-risk occupation that the insurer will not issue a policy at any price. The applicant's status is:
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- A 'survivorship' (second-to-die) life insurance policy is BEST characterized by which of the following?
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Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)