K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
Options:
A. Return of premiums paid
B. Cash value plus interest
C. $20,000 death benefit
D. Face amount plus interest
The Correct Answer Is:
- C. $20,000 death benefit
If K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident then $20,000 death benefit will be paid by insurance company. When an individual is in a car accident, they may be worried about the potential injuries they may sustain. However, someone’s estate can also be at risk if they do not have an endowment policy in place. The purpose of an endowment policy is to protect someone’s assets in the event of their death. Here are some things to keep in mind when creating or updating your endowment policy:
- Make sure you have a comprehensive understanding of what is covered under your policy.
- Review your beneficiary list periodically to make sure that noone has been omitted and that the people you want to receive your assets are on the list.
- Establish a fund structure that will provide adequate protection for your assets.