{"id":170106,"date":"2024-11-19T16:31:25","date_gmt":"2024-11-19T16:31:25","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=170106"},"modified":"2024-11-19T16:31:27","modified_gmt":"2024-11-19T16:31:27","slug":"f-needs-life-insurance-that-provides-coverage-for-only-a-limited-amount-of-time-with-a-death-benefit-that-changes-regularly-according-to-a-schedule","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2024\/11\/19\/f-needs-life-insurance-that-provides-coverage-for-only-a-limited-amount-of-time-with-a-death-benefit-that-changes-regularly-according-to-a-schedule\/","title":{"rendered":"F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule."},"content":{"rendered":"\n

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?<\/p>\n\n\n\n

A. Level term policy<\/p>\n\n\n\n

B. Whole life policy<\/p>\n\n\n\n

C. Limited-pay policy<\/p>\n\n\n\n

D. Decreasing term policy<\/p>\n\n\n\n

The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n

Correct Answer: D. Decreasing term policy<\/strong><\/h3>\n\n\n\n

Explanation:<\/h3>\n\n\n\n

A decreasing term life insurance policy<\/strong> is a type of term life insurance where the death benefit decreases over the policy term according to a predetermined schedule. This type of policy is ideal for individuals who need coverage for a limited period, particularly when their financial obligations reduce over time. For example, it is commonly used to cover a mortgage or other loans that decrease in balance as they are paid off.<\/p>\n\n\n\n

In this scenario, F needs life insurance with:<\/p>\n\n\n\n

    \n
  1. Coverage for a limited amount of time<\/strong>: Term life insurance, including decreasing term policies, provides coverage for a specific period (e.g., 10, 20, or 30 years), unlike whole life insurance which offers lifelong coverage.<\/li>\n\n\n\n
  2. A death benefit that changes regularly<\/strong>: A decreasing term policy is unique because its death benefit reduces at regular intervals, typically reflecting a decline in financial responsibilities over time.<\/li>\n<\/ol>\n\n\n\n

    Here\u2019s how a decreasing term policy works:<\/p>\n\n\n\n

      \n
    • Premiums<\/strong>: The premiums are generally fixed and lower than other types of life insurance, such as whole life insurance.<\/li>\n\n\n\n
    • Coverage Schedule<\/strong>: The policy\u2019s face value (death benefit) decreases according to a preset schedule, which might align with the balance of a mortgage or other debts.<\/li>\n<\/ul>\n\n\n\n

      Why Other Options Are Incorrect:<\/h3>\n\n\n\n
        \n
      • A. Level term policy<\/strong>: The death benefit remains constant throughout the term, which does not meet F’s need for a decreasing death benefit.<\/li>\n\n\n\n
      • B. Whole life policy<\/strong>: This provides permanent coverage with a fixed death benefit and includes a cash value component, making it unsuitable for F\u2019s temporary and adjustable needs.<\/li>\n\n\n\n
      • C. Limited-pay policy<\/strong>: This refers to whole life insurance where premiums are paid for a limited period, but the coverage lasts a lifetime.<\/li>\n<\/ul>\n\n\n\n

        A decreasing term policy<\/strong> provides F with cost-effective, temporary coverage that aligns with diminishing financial obligations.<\/p>\n","protected":false},"excerpt":{"rendered":"

        F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed? A. Level term policy B. Whole life policy C. Limited-pay policy D. Decreasing term policy The Correct Answer and Explanation is: Correct Answer: D. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-170106","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/170106","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=170106"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/170106\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=170106"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=170106"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=170106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}