Question

Term life insurance is a form of insurance that is typically less expensive initially than Whole life insurance and provides pure or temporary protection for a limited period of time. Which of the following statements is NOT TRUE?

A. Term insurance provides death benefit protection for a limited period of time.
B. The cash value endows at age 100.
C. Convertibility to a Whole life policy is often available.
D. Term insurance does not build cash value

Answer 1

Term life insurance does not build cash value. The cash value does not endow at age 100.

Step-by-step explanation:

The statement that is NOT TRUE is B. The cash value endows at age 100.

Term life insurance is a type of insurance that provides death benefit protection for a limited period of time. It is usually less expensive initially compared to whole life insurance. Term insurance does not build cash value, meaning that there is no cash accumulation or investment component. Once the term expires, the coverage typically ends, and there is no cash value payout or endowment at age 100.

On the other hand, whole life insurance has a cash value that builds over time, providing both a death benefit and an investment component. The cash value can be accessed by the policyholder through loans or withdrawals, and it can also be used to pay for premiums. However, term insurance is purely focused on providing temporary death benefit protection and does not have a cash value.