life assurance ss3

1. What is the primary purpose of life assurance?

• a) Provide retirement income

• b) Offer tax deductions

• c) Provide financial protection to beneficiaries in case of the policyholder's death

• d) Accumulate wealth through investments

2. Which type of life assurance offers coverage for a specific term, such as 20 years?

• a) Whole Life Assurance

• b) Universal Life Assurance

• c) Term Life Assurance

• d) Variable Life Assurance

3. What is the cash value component of a permanent life assurance policy?

• a) The amount paid to beneficiaries upon the policyholder's death

• b) The savings or investment portion that grows over time

• c) The premium amount paid by the policyholder

• d) The policy's face value

4. Who receives the death benefit in a life assurance policy?

• a) The policyholder

• b) The insurance company

• c) The policyholder's beneficiaries

• d) The policyholder's estate

5. What is a rider in the context of life assurance?

• a) A person who underwrites the policy

• b) An additional benefit or coverage option that can be added to a policy

• c) The insurance company's profit from the policy

• d) The policyholder's signature on the contract

6. What factor can influence the premium amount of a life assurance policy?

• a) The policy's cash value

• b) The policyholder's age and health

• c) The insurance company's profits

• d) The policy's term length

7. Which type of life assurance policy offers lifelong coverage and a cash value component?

• a) Term Life Assurance

• b) Whole Life Assurance

• c) Universal Life Assurance

• d) Variable Life Assurance

8. What is the purpose of the "waiver of premium" rider in a life assurance policy?

• a) It allows the policyholder to skip premium payments

• b) It waives the waiting period for coverage to begin

• c) It increases the death benefit amount

• d) It provides coverage for accidental death

9. What is the tax status of the death benefit paid out by a life assurance policy to beneficiaries?

• a) Tax-deductible for the beneficiaries

• b) Taxable income for the beneficiaries

• c) Tax-free for the beneficiaries

• d) Tax-deferred for the beneficiaries

10. What is the primary difference between term life assurance and permanent life assurance?

• a) Term life has a cash value component, while permanent life does not.

• b) Term life provides coverage for a specific term, while permanent life offers lifelong coverage.

• c) Permanent life has lower premiums than term life.

• d) Term life policies are only available for senior citizens.