South Carolina Life Insurance Practice Exam

What main benefit do whole life insurance policies provide at the insured's age 100?

1. Monthly income

2. Cash payout

3. Long-term care coverage

4. Health coverage

The correct answer is: Cash payout

Whole life insurance policies are designed to provide a guaranteed cash payout, also known as the death benefit, to the beneficiaries at the death of the insured. One of the significant features of whole life insurance is that it accumulates cash value over time, which can be accessed by the policyholder during their lifetime under specific terms. At the age of 100, the insured reaches a milestone known as the “endowment age,” where the policy's cash value equals the death benefit. Upon reaching this age, if the insured is still alive, the policy is designed to pay out the full cash value to the policyholder. This ensures that the insured can benefit from their investment in the policy regardless of whether they pass away or continue living beyond this age. Since the focus of the question is on the benefit received at age 100, the cash payout reflects the culmination of the policy's value, allowing the insured to receive funds that can be utilized according to their needs, thus making it the correct answer.