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.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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Which statement best describes a whole life policy?

Requires premium payments for life, endowing at age 100
Requires premiums until age 65, endowing at age 120
Requires premiums until age 90, endowing at age 100
Is a single premium policy, endowing at a specified age

The correct answer is: Requires premium payments for life, endowing at age 100

A whole life policy is designed to provide coverage for the lifetime of the insured, which is why it requires premium payments for life. The policy is structured to endow at age 100, meaning that if the insured reaches that age, the face value of the policy is paid out to the policyholder. This characteristic allows policyholders to have a reliable, lifelong coverage option along with a savings component that accumulates cash value over time. The other options describe payment structures or endowment ages that do not align with the characteristics of whole life policies. Whole life insurance is typically known for its lifelong coverage and predictable premium payments, contrasting with limited pay options or single premium policies described in the other choices.