New Jersey Life Insurance Exam Practice Question
Sam has a $100,000 5-year, non-renewable level term life insurance with the wife as the beneficiary. Sam died 8 years after the policy. How much will be paid to Sam’s wife?
Correct Answer: A
Rationale: The policy Sam held was a 5-year, non-renewable level term life insurance, meaning it provided coverage only during the specified 5-year term. Since Sam died 8 years after the policy began, the coverage had expired, and no benefits are payable.
Option B ($40,000) and Option C ($10,000) suggest partial payouts, which are incorrect as term life insurance does not provide any cash value or partial benefits after the term ends.
Option D ($100,000) implies that the full amount would be paid, which is also incorrect due to the expiration of the policy. Thus, no benefit is payable to Sam's wife.
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