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Benefits Intermediate: Whole Life Insurance

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1.
Mutual insurance company dividends are taxable.
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False. Mutual insurance company dividends are a tax-free return of premium.
2.
In a whole life insurance policy, part of the premium you pay _______.
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Both covers the death benefit and is invested. Your premium goes toward both of these.
3.
You can borrow the cash value of your life insurance policy through _______.
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Tax-free loans. You can take out the cash value of your permanent policy through tax-free loans.
4.
You can borrow from your whole life insurance policy, but only for education expenses.
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False. You can borrow for any reason, even to pay your premiums.
5.
As long as you make your premium payments, a permanent life insurance policy will cover you for life.
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True. A permanent life insurance policy covers you for life as long as you make your monthly premiums.