Massachusetts Life Producer Practice Exam

What type of life insurance provides coverage for the entire life of the insured?

1. Term life insurance

2. Whole life insurance

3. Universal life insurance

4. Variable life insurance

The correct answer is: Whole life insurance

Whole life insurance is designed to provide coverage for the entire life of the insured, which is why it is the correct answer. This type of policy guarantees a death benefit to the beneficiary as long as the premiums are paid, ensuring lifelong protection. Additionally, whole life insurance typically accumulates cash value over time, which policyholders can borrow against or withdraw, adding a savings component to the coverage. Term life insurance, on the other hand, offers protection for a specific period, such as 10, 20, or 30 years, but does not provide coverage beyond that term unless it is renewed or converted. Universal life and variable life insurance are types of permanent life insurance, like whole life, in that they also provide lifelong coverage, but they offer more flexible premium payments and potential investment components. However, they do not guarantee cash value growth in the same way whole life does, which is tied to a set formula established by the insurer. Thus, whole life insurance stands out as the option that explicitly guarantees coverage for the insured's entire lifetime, offering both stable benefits and cash value accumulation.