West Virginia State Life Insurance Practice Exam

A policy owner is allowed to pay premiums more than once a year under which provision?

1. Mode of premium

2. Variable premium

3. Flexible premium

4. Premium payment provision

The correct answer is: Mode of premium

The correct choice is related to the "Mode of premium" provision, which refers to the frequency with which premiums can be paid on a life insurance policy. This provision allows policyholders the flexibility to choose how often they make premium payments, whether it be annually, semi-annually, quarterly, or monthly. By allowing various payment modes, it accommodates the financial situations and preferences of different policyholders. Choosing a payment mode that suits one's financial capacity can lead to better management of cash flow and ensure that the policy remains in force without lapses due to missed payments. This provision is essential because it recognizes that policyowners may have different capabilities and needs regarding premium payments, thus providing them with more control over their insurance expenses.