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Benefits Intermediate: Whole Life Insurance

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1.
When a mutual insurance company takes in more money than it needs to pay benefits and expenses for a participating policy, it issues _______.
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Dividends. A mutual insurance company's surplus gets paid back to policy owners in the form of dividends.
2.
The cost of life insurance is based on which of the following factors?
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All of the above. The price of life insurance takes all of these factors into account.
3.
In a whole life insurance policy, cash value refers to _______.
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The amount of the policy you will get if you surrender your policy before you die. As opposed to face value, which is what your dependents will get, cash value is what you will get if you should cancel your policy early.
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.
In a whole life insurance policy, your guaranteed cash value is used to keep your premiums level.
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True. The cash value in permanent insurance is used to keep your premiums from increasing over time.