New Jersey Life Insurance Exam Practice Question
The Living Benefit option in a life insurance policy is also known as
Correct Answer: C
Rationale: The Living Benefit option in a life insurance policy allows policyholders to access a portion of their death benefit while still alive, typically in cases of terminal illness. This is commonly referred to as the accelerated death benefit.
Option A, disability income benefit, refers to payments made to replace lost income due to disability, not related to life insurance death benefits. Option B, payor benefit, applies to policies where premiums are waived if the policyholder becomes disabled or dies, but it does not provide living benefits. Option D, catastrophic illness benefit, may cover specific severe health conditions but is not synonymous with the broader concept of accessing death benefits early.
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