Minnesota Life Insurance License Practice Exam

Which type of policy provides coverage to age 100 with equal premium payments?

1. Term life policy

2. Straight whole life policy

3. Universal life policy

4. Variable life policy

The correct answer is: Straight whole life policy

A straight whole life policy provides coverage up to age 100 with equal premium payments, making it a foundational product in life insurance. This type of policy is designed to remain in force for the lifetime of the insured, as long as premiums are paid, which typically results in a guaranteed death benefit. The premium payments are level and do not increase over time, providing predictability for the policyholder's financial planning. In contrast, a term life policy is temporary, providing coverage for a specific period and does not accumulate cash value. Universal life policies offer more flexibility in premium payments and benefits but can fluctuate, while variable life policies allow policyholders to invest the cash value in various options but also come with variable premiums and death benefits. Hence, the features of the straight whole life policy align with the question’s requirements regarding coverage to age 100 and equal premium payments.