Tennessee Life Producer Practice Exam

Which life insurance policy provides coverage for a specified term with a fixed premium?

1. Term Life

2. Whole Life

3. Universal Life

4. Variable Universal Life

The correct answer is: Term Life

The correct answer is term life insurance, which is designed to provide coverage for a specific duration or term—typically ranging from one to thirty years. One of the key characteristics of term life insurance is that it features a fixed premium, meaning the amount you pay remains constant throughout the duration of the term. This predictability makes it an attractive option for individuals looking for affordable life insurance without the complexities associated with permanent policies. Term life insurance provides a straightforward approach to coverage, as it pays out a death benefit only if the insured passes away during the term. If the term expires and the policyholder is still alive, no benefits are paid, and the coverage ends unless renewed. This structure allows policyholders to secure substantial coverage for a fixed period at a lower cost compared to whole life or variable universal life policies, which involve different premium structures and savings components.