West Virginia State Life Insurance Practice Exam

Which type of life policy pays the face amount if the insured lives to a certain age?

1. Term Life Policy

2. Endowment at age 65

3. Joint Life Policy

4. Whole Life Policy

The correct answer is: Endowment at age 65

The endowment policy is designed to pay out the face amount of the policy if the insured survives to a specified age, in this case, age 65. This type of insurance combines elements of both life insurance and savings, as it provides a death benefit if the insured passes away before reaching the specified age and presents a cash benefit if the insured lives to that age. Upon reaching the endowment age, the policyholder receives the cash value, which could be useful for retirement planning or other financial needs at that life stage. The guaranteed payout at the end of the policy term, contingent on survival, distinguishes this option from others, such as a whole life policy, which provides benefits upon death at any time, and term life policies, which only offer benefits during a predetermined term but do not provide a payout if the insured survives the term. In summary, the correct choice recognizes the unique feature of endowment policies, differentiating it from other types of life insurance products.