BUISENESS MANAGEMENT
INSURANCE
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
one-fifth of the $20, 000 face value.
|
|
|
$20, 000 less the premiums paid.
|
|
|
a calculated amount of money which includes the premiums paid as well as the interest on that money.
|
|
|
a calculated amount of money that must be converted to a term life insurance policy.
|
Detailed explanation-1: -Term life is designed to cover you for a specified period (say 10, 15 or 20 years) and then end. Because the number of years it covers are limited, it generally costs less than whole life policies. But term life policies typically don’t build cash value. So, you can’t cash out term life insurance.
Detailed explanation-2: -20 Pay Life Insurance is a type of Limited Pay Life Insurance (typically Whole Life Insurance) that requires payments over 20 annual installments. 20 Pay Life Insurance can be used as an additional source of income for the family or to help cover monthly expenses in the event of your death.
Detailed explanation-3: -What happens after 20 years? At the end of the 20-year life insurance term, the period for fixed premiums expires. If you decide not to renew the policy-or renewal is not available for the policy-no death benefit will be paid to your beneficiaries.
Detailed explanation-4: -To calculate the cash surrender value of life insurance, add up all the payments applied to the policy. Then, subtract the surrender fees and outstanding balances against the cash value.