California Insurance License Exam Practice Test Practice Question
From lowest to highest, what is the order of initial premiums for life insurance policies?
Correct Answer: B
Rationale: Understanding the order of initial premiums for life insurance policies is crucial for financial planning.
Modified premiums are typically lower than ordinary life premiums at the outset, making them the first in order. Ordinary life policies usually require a higher initial premium due to their level coverage and duration. Single premium policies, while providing immediate full coverage, demand a one-time higher payment, placing them at the top of the list.
Options A, C, and D misplace these categories, failing to recognize the initial cost structure associated with each policy type.
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