Which of the Following Is Characteristic of Term Life Insurance

question 18

Multiple Choice

Which of the following is characteristic of term life insurance?

• A)Provides no investment features
• B)Costs more than other types of life insurance
• C)Has premiums that decrease over one's lifetime
• D)Pays benefits to the insured when the insured reaches age 65

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Definitions:

Compounded Quarterly

A method of calculating interest where the accumulated interest is added to the principal amount at the end of each quarter, leading to interest being earned on interest.

Compound Interest

Interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Future Value

The worth of a present asset on a future specified date, calculated using a projected growth rate.

Future Value

The value of a current asset at a specified date in the future based on an assumed rate of growth over time.