Choose as many answers as apply.
Which of the following statements are true of ordinary whole-life insurance policies?
A. The insured pays premiums on this type of insurance until his death.
B. Ordinary whole life insurance covers the insured for the stated term of the policy.
C. Ordinary whole life insurance has some value as an investment.
D. The insured only has to pay on this type of policy for a certain number of years.
I meant A and D
The true statements about ordinary whole-life insurance policies are:
A. The insured pays premiums on this type of insurance until his death.
C. Ordinary whole life insurance has some value as an investment.
To determine which statements are true of ordinary whole life insurance policies, let's analyze each option:
A. The insured pays premiums on this type of insurance until his death.
To verify this statement, we need to understand how ordinary whole life insurance works. Ordinary whole life insurance requires the insured to pay premiums throughout their entire life until they pass away. Hence, statement A is true.
B. Ordinary whole life insurance covers the insured for the stated term of the policy.
This statement is not true for ordinary whole life insurance policies. Unlike term life insurance, where coverage is provided for a specific term, ordinary whole life insurance covers the insured for their entire life, as long as they continue paying the premiums.
C. Ordinary whole life insurance has some value as an investment.
This statement is true. Ordinary whole life insurance policies accrue a cash value over time. The policyholder is often able to take out loans against this cash value or surrender the policy for a reduced payout, which can be seen as an investment component.
D. The insured only has to pay on this type of policy for a certain number of years.
This statement is not true for ordinary whole life insurance policies. Unlike limited payment life insurance, where premiums are paid for a fixed number of years, ordinary whole life insurance requires the insured to pay premiums throughout their entire life.
So, the true statements are:
A. The insured pays premiums on this type of insurance until his death.
C. Ordinary whole life insurance has some value as an investment.