AD Banker Comprehensive Practice Exam

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Enhance your exam readiness with the AD Banker Comprehensive Exam guide. Includes flashcards and multiple-choice questions with explanations.

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What duration is commonly seen for grace periods in annuity or pure endowment contracts?

30 days
15 days
45 days
60 days

The correct answer is: 30 days

In the context of annuity or pure endowment contracts, grace periods are typically provided to policyholders to allow for the payment of premiums without penalty. A common duration for grace periods in these types of contracts is 30 days. This period enables the policyholders to catch up on missed payments while still maintaining their coverage or investment in the annuity. During this time, the policy remains in force, ensuring that the insured or the investor will not lose benefits due to a temporary lapse in premium payment. Other durations like 15, 45, and 60 days are less common for grace periods specifically in annuity or pure endowment contracts. While some insurers may offer variations, 30 days is widely recognized as the standard practice. This standardization helps in maintaining consistency across the industry and provides policyholders with a reasonable timeframe to manage their financial commitments.