Oklahoma Life Producer Practice Exam

________ life insurance is temporary, whereas _______ life insurance is permanent.

1. Annual, term

2. Term, whole

3. Whole, term

4. Convertible, term

The correct answer is: Term, whole

Term life insurance is designed to provide coverage for a specific period, typically ranging from one to thirty years. It is considered temporary because once the term expires, the coverage ends unless renewed, and it does not accumulate any cash value during that period. This makes it an affordable option for individuals looking for protection without the long-term financial commitment of permanent insurance. Whole life insurance, on the other hand, is a type of permanent life insurance that provides coverage for the insured's entire lifetime, as long as premiums are paid. It also has the added benefit of accumulating cash value over time, which can be borrowed against or withdrawn by the policyholder. This cash value component sets it apart from term insurance, making it a more permanent solution for those seeking lifelong protection. In summary, the distinction is based on the duration of coverage: term life insurance is temporary, while whole life insurance is meant to last for the insured's lifetime, providing both insurance and a savings component.