Which of the following statements about surrender value under traditional participating life insurance products is TRUE? A) Cash value is paid when a yearly renewable term insuranc... Which of the following statements about surrender value under traditional participating life insurance products is TRUE? A) Cash value is paid when a yearly renewable term insurance policy is surrendered B) When a participating insurance policy is surrendered, the surrender value is calculated by multiplying the bid price with number of units C) The amount of surrender value is usually higher than the amount under non-participating policies and it varies with the age of the assured D) In the case of participating policies, the net cash surrender value includes the surrender value of the paid-up addition up to the date of surrender
Understand the Problem
The question is asking which statement about surrender value in traditional participating life insurance products is true. It presents four potential statements to choose from and requires an understanding of how surrender values work in the context of these insurance policies.
Answer
The net cash surrender value includes the surrender value of the paid-up addition up to the date of surrender for participating policies.
In the case of participating policies, the net cash surrender value includes the surrender value of the paid-up addition up to the date of surrender.
Answer for screen readers
In the case of participating policies, the net cash surrender value includes the surrender value of the paid-up addition up to the date of surrender.
More Information
Traditional participating life insurance policies provide a surrender value that includes the main policy’s cash value and any additional value from paid-up additions, which are bonus additions to the base policy. This is different from non-participating policies that generally do not have such additions.
Tips
A common mistake is misunderstanding the types of policies and how their surrender values are calculated. It's important to differentiate between participating and non-participating policies.
AI-generated content may contain errors. Please verify critical information
