Which payout describes a life insurance policy where the beneficiary receives only the face amount?

Which payout describes a life insurance policy where the beneficiary receives only the face amount?

• A. Beneficiary gets the face amount alone
• B. Beneficiary gets the face amount and the value of the cash account
• C. Indexed Whole Life
• D. Standard and Poor 500

Answer: (A)

Payouts that give only the face amount describe a death benefit with no cash value. The face amount is the stated death benefit, and if a policy has no cash value or riders payable at death, the beneficiary receives just that amount. This is typical of term life, which doesn’t build cash value, unlike permanent policies that accumulate cash value. So, the option describing the beneficiary receiving the face amount alone matches this concept. The other choices introduce a cash value, refer to a policy type with cash value like Indexed Whole Life, or mention something unrelated to payout structure.

Payouts that give only the face amount describe a death benefit with no cash value. The face amount is the stated death benefit, and if a policy has no cash value or riders payable at death, the beneficiary receives just that amount. This is typical of term life, which doesn’t build cash value, unlike permanent policies that accumulate cash value. So, the option describing the beneficiary receiving the face amount alone matches this concept. The other choices introduce a cash value, refer to a policy type with cash value like Indexed Whole Life, or mention something unrelated to payout structure.