Minnesota Life Insurance License Practice Exam

Which policy typically provides lifetime coverage as long as premiums are paid?

1. Term life insurance

2. Whole life insurance

3. Endowment policy

4. Accidental death policy

The correct answer is: Whole life insurance

Whole life insurance is designed to provide coverage for the insured's entire lifetime, as long as the premiums are consistently paid. This type of policy not only offers a death benefit to beneficiaries upon the insured's passing but also accumulates cash value over time. The cash value component allows policyholders to borrow against the policy or withdraw funds if needed, adding an element of savings to the insurance coverage. This contrasts with term life insurance, which provides coverage for a specified period and does not accumulate cash value. Endowment policies differ as they typically pay a benefit either upon the insured's death or after a set period, rather than providing lifelong coverage. Accidental death policies, meanwhile, solely cover death resulting from accidents and do not provide the comprehensive lifetime coverage that whole life insurance offers. Therefore, whole life insurance stands out as the policy that guarantees lifetime coverage, contingent on the payment of premiums.