Oklahoma Life Producer Practice Exam

In what situation would a Family Income Policy provide additional years of benefits?

1. When premiums are unpaid

2. When the insured dies after a certain term

3. When the policy is renewed

4. When a spouse remarries

The correct answer is: When the insured dies after a certain term

A Family Income Policy is designed to provide a steady income to beneficiaries for a specified period in the event of the insured's death. This policy typically pays the face amount of coverage as a lump sum in case of the insured's death, along with monthly income payments for a predetermined number of years, often until children reach adulthood. When the insured dies after a certain term, it triggers the policy's benefits as intended. If the insured passes away during the period specified in the policy, the beneficiaries not only receive a lump-sum benefit but also the additional years of income support promised by the policy. This structure is particularly beneficial for families that rely on the insured's income for their daily living expenses, ensuring financial stability for them during a critical time. The other scenarios described do not activate additional benefits under the Family Income Policy. Unpaid premiums would typically lead to a lapse in coverage. Policy renewals are standard practices that do not extend the benefit period. Finally, a spouse remarrying generally does not affect the coverage amount or the duration of benefits provided to the named beneficiaries. Thus, the situation where the insured dies during the established term of the policy most directly results in extended financial support for the family, making it the correct response.