Question

1. For the same amount of premiums in comparison to whole life insurance, term life insurance generally purchases

a.a greater amount of coverage.

b.less amount of coverage.

c.the same amount of coverage.

d.a higher deductible.

e.a lower deductible.

2. Annual Cost-of-Living-Adjustment (COLA) changes of coverage levels within long-term care insurance, disability insurance, or homeowner's insurance policies is generally designed to protect policyholders against

a.the adverse event occurring.

b.lower rates of return.

c.lack of insurability.

d.the company defaulting on its payments.

e.inflation.

Answer 1

1. For the same amount of premium, term life insurance policies give more coverage than the whole life insurance. That is, term life policies are less expensive compared to whole life policies.

The answer is option 'a': A greater amount of coverage.

2. Annual Cost of Living Adjustment in insurance policies is generally designed to protect the insured against inflation.

The answer is option e