Insurance Awareness - Life Insurance - LIC
Which of the following best describes a term insurance policy?
Which of the following best describes a term insurance policy?
easy Q11 of 15
Step-by-Step Solution
Step 1: Identify the nature of term insurance
Term insurance is designed to provide pure risk cover, meaning it pays the sum assured only if the insured dies during the policy term, without any maturity or surrender benefits.Final Answer:
It offers pure risk cover for a specified period without any maturity benefit. → Option DQuick Check:
Term insurance is known as pure protection insurance, confirming It offers pure risk cover for a specified period without any maturity benefit. is correct.
Quick Trick: Remember: Term insurance = Death benefit only, no maturity.
Common Mistakes:
MISTAKES- Confusing term insurance with endowment or money-back policies that have maturity benefits.
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