Life & Health Insurance Practice Exam

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Study for the Life and Health Insurance Exam. Prepare with questions and multiple choice quizzes. Each question has hints and explanations. Get ready for your certification!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What type of insurance would likely not provide a cash value component?

Whole life insurance
Universal life insurance
Term life insurance
Endowment insurance

The correct answer is: Term life insurance

Term life insurance is designed primarily to provide a death benefit for a specified period, such as 10, 20, or 30 years. It is a temporary form of coverage that pays out only if the insured person dies during the term of the policy. Unlike whole life, universal life, and endowment insurance, term life does not accumulate any cash value over its duration. Whole life insurance and universal life insurance are both forms of permanent life insurance that include a cash value component. This cash value grows over time and can be accessed by the policyholder during their lifetime. Endowment insurance also has a cash value component, which is paid out either upon the insured’s death or if the policyholder lives to the end of the policy term. Therefore, it is term life insurance that stands out as not providing a cash value component, focusing solely on risk protection without a savings or investment aspect.