QuestionJune 4, 2025

How would the premiums and cash values of a 20-payment life policy compare to a whole life policy? A) The premiums would be higher and the cash values would be lower. B) The premiums and cash values would be higher. C) The premiums would be lower and the cash values would be higher. D) The premiums and cash values would be lower.

How would the premiums and cash values of a 20-payment life policy compare to a whole life policy? A) The premiums would be higher and the cash values would be lower. B) The premiums and cash values would be higher. C) The premiums would be lower and the cash values would be higher. D) The premiums and cash values would be lower.
How would the premiums and cash values of a 20-payment life policy compare to a whole life policy?
A) The premiums would be higher and the cash values would be lower.
B) The premiums and cash values would be higher.
C) The premiums would be lower and the cash values would be higher.
D) The premiums and cash values would be lower.

Solution
4.0(308 votes)

Answer

B) The premiums and cash values would be higher. Explanation 1. Compare Premiums A 20-payment life policy requires premiums to be paid over a shorter period (20 years) compared to a whole life policy, which spreads payments over the insured's lifetime. Therefore, **premiums for a 20-payment life policy are higher**. 2. Compare Cash Values Since the 20-payment life policy accumulates cash value faster due to higher premiums and a shorter payment period, **cash values for a 20-payment life policy are higher** than those of a whole life policy.

Explanation

1. Compare Premiums<br /> A 20-payment life policy requires premiums to be paid over a shorter period (20 years) compared to a whole life policy, which spreads payments over the insured's lifetime. Therefore, **premiums for a 20-payment life policy are higher**.<br /><br />2. Compare Cash Values<br /> Since the 20-payment life policy accumulates cash value faster due to higher premiums and a shorter payment period, **cash values for a 20-payment life policy are higher** than those of a whole life policy.
Click to rate:

Similar Questions