Tennessee Insurance Exam 2025 – 400 Free Practice Questions to Pass the Exam

The face amount of a Whole Life policy is disbursed either at the policy's maturity date or upon the insured's death. This payment reflects the policy's intended purpose, which is to provide a death benefit to the beneficiaries when the insured passes away. Whole Life insurance is designed to last for the entire life of the insured, ensuring that a guaranteed benefit is made available upon death, regardless of when that occurs.

Additionally, these policies typically also have a maturity date, which is often the age of 100, at which point the face amount is paid out to the policyholder if they are still living. This dual option for disbursement is a fundamental characteristic of Whole Life insurance, distinguishing it from other types of life insurance that might only disburse a death benefit.

The other scenarios listed do not result in a disbursement of the face amount. If the policy lapses or if the policyholder stops paying premiums, the policy may terminate without any payout. Selling the policy to another party might result in a transfer of ownership but does not trigger a disbursement of the face amount until one of the two main conditions of maturity or death is met.