New York Insurance Exam Practice Question
Which type of insurance policy provides coverage for a specified term?
Correct Answer: C
Rationale: Term life insurance provides coverage for a specified term, typically ranging from one to thirty years. It is designed to pay a death benefit only if the insured passes away within that term, making it a straightforward and affordable option for temporary needs.
Whole life insurance offers lifelong coverage with a cash value component, while universal life insurance provides flexible premiums and death benefits but does not limit coverage to a specific term. Variable life insurance allows policyholders to invest their cash value in various investment options, also lacking the term limitation. Thus, only term life insurance focuses specifically on a defined period of coverage.
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