West Virginia State Life Insurance Practice Exam

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Study for the West Virginia State Life Insurance Exam. Utilize flashcards and multiple choice questions with hints and explanations. Prepare to ace your exam!

Practice this question and more.

Which provision allows a policy owner to make premium payments more than once a year?

Automatic renewal
Mode of premium
Dividend option
Grace period

The correct answer is: Mode of premium

The provision that allows a policy owner to make premium payments more than once a year is the mode of premium. This term refers to the frequency with which premium payments can be made, such as annually, semi-annually, quarterly, or monthly. By selecting a mode of premium, the policy owner can choose a payment schedule that fits their financial situation and budgeting preferences. For example, if a policyholder chooses a monthly payment mode, they will be able to make their premium payments twelve times a year instead of just once annually. Different modes may also affect the overall cost of the premium due to potential administrative fees or discounts associated with certain payment frequencies. Understanding the mode of premium is essential for policy owners because it directly impacts their payment strategy and cash flow management, making it a critical aspect of policy management.