Oklahoma Life Producer Practice Exam

What can both Whole Life and Term policies do regarding death benefits?

1. Expire

2. Accrue dividends

3. Mature

4. Convert

The correct answer is: Mature

Both Whole Life and Term policies provide death benefits, which can be seen as a key function of these insurance products. The term "mature" in this context refers to the point at which the insurance policy fulfills its primary purpose, which is to pay out the death benefit to the designated beneficiaries upon the death of the insured. For term policies, they are designed to provide coverage for a specified period. If the insured passes away within that term, the policy matures, and the death benefit is paid to the beneficiaries. Whole Life policies, on the other hand, provide lifelong coverage, meaning they are designed to mature when the insured passes away at any time, ensuring that the death benefit is paid regardless of when that occurs, as long as premiums are kept current. Understanding that both policy types ultimately aim to provide a death benefit reinforces the importance of having life insurance as a financial safety net, regardless of the duration of coverage. This fundamental purpose of providing a death benefit is what makes the option of "mature" relevant to both Whole Life and Term policies.