West Virginia State Life Insurance Practice Exam

P is looking to purchase a life insurance policy that will provide a monthly income to beneficiaries for 20 years after death and a lump sum at the end of that period. What type of policy should he purchase?

1. Whole Life policy

2. Term Life policy

3. Family Maintenance policy

4. Survivorship policy

The correct answer is: Family Maintenance policy

The Family Maintenance policy is designed specifically to provide a monthly income to beneficiaries over a set period, typically following the insured's death, along with a lump sum payout at the end of that same period. In this scenario, where P wishes to secure a monthly income for 20 years for his beneficiaries and then provide a lump sum after that period, the Family Maintenance policy perfectly meets these requirements. This type of policy effectively combines the features of term insurance and a whole life policy, making it an effective solution for individuals wanting to offer financial support over a defined period while also ensuring a final benefit. Thus, for P’s situation, the Family Maintenance policy is the most suitable life insurance product to fulfill those specific objectives.