PA Life and Health Insurance Exam - Life Insurance Policies Questions and Answers

Term Life Insurance Temporary protection, only provides coverage for a specific period of time. Also known as pure life insurance. Pure Death Protection What is provided by Term insurance. If the insured dies during this term, the policy pays the death benefit to the beneficiary. Level Term Insurance Most common type of temporary protection purchased. Refers to the fact that the death benefit does not change throughout the life of the policy Level Premium Term Provides a level death benefit and a level premium during the policy term Annually Renewable Term Purest form of insurance. Death benefit remains level, and the policy may be guaranteed to be renewable each year without proof of insurability. Decreasing Term Feature a level premium and a death benefit that decreases each year over the duration of the policy term. Primarily used when the amount of needed protection is time sensitive. Commonly used to insure the payment of a mortgage or other debts if the insured dies prematurely. Increasing Term Features level premiums and a death benefit that increases each year over the duration of the policy term. The amount of the increase in the death benefit is usually expressed as a specific amount or percentage. Return of Premium (ROP) Life Insurance Increasing term policy that pay an additional death benefit to the beneficiary equal to the amount of the premiums paid. Have a low risk factor but premiums cost significantly more.