Question

What is the face amount of a $50,000 graded death benefit life insurance policy when the policy is issued?

A. $0
B. $50,000
C. Under $50,000 initially, but decreases annually over time
D. Under $50,000 initially, but increases over time

Answer 1

The face amount of a $50,000 graded death benefit life insurance policy starts under $50,000 and increases to the full amount over time.

Step-by-step explanation:

The face amount of a $50,000 graded death benefit life insurance policy when the policy is issued is under $50,000 initially, but increases over time. Graded death benefit policies are designed for individuals who may not meet the health qualifications for traditional life insurance policies. These policies start with a lower death benefit, which increases to the full face value over a specified period, typically a few years.

Answer 2

The face amount of a $50,000 graded death benefit life insurance policy when the policy is issued is initially under $50,000, but increases over time.

Step-by-step explanation:

The face amount of a $50,000 graded death benefit life insurance policy when the policy is issued is under $50,000 initially, but increases over time. In a graded death benefit policy, the death benefit starts at a lower amount and gradually increases over a period of time. The policyholder may need to pay higher premiums initially in exchange for the increasing death benefit. After a certain period, typically a few years, the death benefit reaches the full face value of $50,000.