Question

When Kathy buys a single-premium whole life policy, she A. makes the same premium payment each year of the policy period. B. makes the same premium payment each year for a limited number of years and is then covered for her whole life. C. makes the same premium payment each year for her whole life and is covered for her whole life. D. pays the entire premium in a lump sum when the policy is issued and is then covered for her whole life.

Answer 1

D. pays the entire premium in a lump sum when the policy is issued and is then covered for her whole life

Step-by-step explanation:

Life insurance refers to a type of cash value life insurance. Therefore, a Single Premium Whole Life insurance involves paying a large sum of money to the insurance policy toward a death benefit which is completely guaranteed to remain paid-up until the owner has died.