Whole Life Insurance Contracts

question 25

Multiple Choice

Whole life insurance contracts:

• A)do not bind the insurer to pay the face value of the policy on the death of the insured.
• B)have a convertibility feature that allows the insured to convert the policy to a term life policy.
• C)has no cash surrender value if the policy is terminated.
• D)require the insured to pay the specified premium for the duration of his/her life.

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Definitions:

Indebtedness

The condition of owing money or being under financial obligation to others, which could include loans or issued bonds.

Profitability

A measure of how efficiently a company or business generates profit in relation to its revenue.