FREE ExamFX Life Insurance Questions and Answers
What is the primary purpose of life insurance?
he primary purpose of life insurance is to provide financial protection to the beneficiaries of the insured after their death. While some policies may include features like building cash value, the core goal remains ensuring the financial security of loved ones.
What is a term life insurance policy?
Term life insurance provides coverage for a specified period (e.g., 10, 20, or 30 years). It does not accumulate cash value and is generally less expensive than permanent life insurance options.
Which of the following is NOT a common life insurance policy option?
Disability income insurance is a separate type of policy that provides income replacement in case of disability. It is not a form of life insurance, unlike the other options listed.
Who is the primary beneficiary in a life insurance policy?
The primary beneficiary is the person or entity the policyholder designates to receive the death benefit when the insured dies. This ensures that the benefit is distributed as intended.
What happens if the policyholder fails to pay the premium on time?
Most life insurance policies include a grace period (usually 30 days) after the premium due date, allowing the policyholder to make the payment without losing coverage. If the payment is not made by the end of the grace period, the policy may lapse.