What type of policy is specifically designed to pay death benefits only if the insured dies during a stated period?

What type of policy is specifically designed to pay death benefits only if the insured dies during a stated period?

• A. Universal Life
• B. Term Life
• C. Whole Life
• D. Endowment Policy

Answer: (B)

The correct choice is a Term Life policy, and this answer is correct because Term Life insurance is specifically designed to provide coverage for a predetermined period. If the insured dies during that specified term, the policy pays out a death benefit to the beneficiaries. If the insured survives beyond the term, the coverage ends and there is no payout, which differentiates it from other types of life insurance. Term Life insurance is often chosen for its simplicity and affordability, making it suitable for individuals requiring coverage for a specific timeframe, such as while raising children, paying off a mortgage, or until retirement. Its clear focus on providing a death benefit within a limited time frame makes it an effective choice for those seeking temporary life insurance solutions. In contrast, Universal Life and Whole Life policies are permanent insurance options that offer lifelong coverage and often include aspects like cash value accumulation. An Endowment Policy also pays a benefit, either at the end of a specific term or upon the insured's death, but it is structured differently than Term Life and usually involves savings elements intended for specific uses, like funding education or retirement.

The correct choice is a Term Life policy, and this answer is correct because Term Life insurance is specifically designed to provide coverage for a predetermined period. If the insured dies during that specified term, the policy pays out a death benefit to the beneficiaries. If the insured survives beyond the term, the coverage ends and there is no payout, which differentiates it from other types of life insurance.

Term Life insurance is often chosen for its simplicity and affordability, making it suitable for individuals requiring coverage for a specific timeframe, such as while raising children, paying off a mortgage, or until retirement. Its clear focus on providing a death benefit within a limited time frame makes it an effective choice for those seeking temporary life insurance solutions.

In contrast, Universal Life and Whole Life policies are permanent insurance options that offer lifelong coverage and often include aspects like cash value accumulation. An Endowment Policy also pays a benefit, either at the end of a specific term or upon the insured's death, but it is structured differently than Term Life and usually involves savings elements intended for specific uses, like funding education or retirement.