Tennessee Insurance Practice Exam

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What aspect of whole life insurance is indicated by the term "straight"?

The age at which it matures
The non-changing interest rate
The fixed premium payment period
The guaranteed benefit at death

The correct answer is: The fixed premium payment period

The term "straight" in the context of whole life insurance specifically refers to the fixed premium payment period. In a "straight life" policy, premiums are paid at a consistent rate and over the insured's lifetime. This means that the policyholder will make regular premium payments until death or the policy matures, ensuring that the insurance coverage remains in effect for the duration of the individual's life. This contrasts with other types of whole life policies where the premium payment period may vary. For instance, other policies may allow for payments over a specific term or for a limited number of years. Therefore, recognizing that "straight" indicates a fixed and ongoing commitment to premium payments confirms the unique structure of this type of whole life insurance.