California Life and Health Insurance Practice Exam

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Study for the California Life and Health Insurance Exam. Prepare with comprehensive flashcards and multiple choice questions, each with detailed hints and explanations. Gear up for success with our extensive learning materials!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which type of insurance provides coverage for a defined period?

Whole life insurance
Term life insurance
Universal life insurance
Variable life insurance

The correct answer is: Term life insurance

Term life insurance is designed to provide coverage for a specific period, or term, which can range from one year to several decades. If the insured passes away during this designated term, the beneficiaries receive the death benefit. However, if the term expires and no renewal is made, coverage ceases, and there is no payout or cash value accumulated. In contrast, whole life insurance, universal life insurance, and variable life insurance are types of permanent life insurance. These policies are designed to last for the insured's entire lifetime, as long as the premiums are paid. They also accumulate cash value over time, which can be borrowed against or withdrawn. Therefore, term life insurance distinctly focuses on coverage for a set period, making it the correct choice for this question.