In life insurance, what does the term 'life income' refer to?

Prepare for the Proactive Licensing Test by engaging with comprehensive multiple choice questions and flashcards that deliver detailed hints and explanations. Master key concepts and ace your exam!

The term 'life income' in the context of life insurance refers specifically to payments made to the insured for the duration of their life. This involves a financial arrangement where the insurance company guarantees a steady stream of income to the policyholder until their death. This type of arrangement is often featured in whole life or universal life policies, where the insured may receive mandatory distributions or options that provide lifelong income.

This concept is critical in understanding how certain life insurance products function, especially when considering retirement planning or financial security for beneficiaries. The predictability and regularity of life income can provide peace of mind and help manage long-term financial needs. Other responses may point to different aspects of life insurance but do not encompass the lifelong periodic payments that are central to the definition of 'life income.'

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy