Arizona Life and Health Practice Exam

Which statement about whole life insurance is accurate?

1. It has a specified term.

2. Insurance coverage can continue for life.

3. It requires annual renewals.

4. It does not accumulate cash value.

The correct answer is: Insurance coverage can continue for life.

Whole life insurance is designed to provide coverage for the insured's entire lifetime, as long as premiums are paid. This characteristic distinguishes it from term life insurance, which only provides coverage for a specified period. Whole life policies are often sought after for their lifelong protection and the peace of mind that comes with it, knowing that beneficiaries will receive a death benefit, regardless of when the policyholder passes away. In addition to lifelong coverage, whole life insurance also typically includes a cash value component, which grows over time and can be utilized for loans or withdrawals by the policyholder. This added feature underscores the long-term financial benefits of holding a whole life policy, which supports the idea of insurance coverage that extends throughout one's life rather than just for a limited term.