Washington Life Producer Practice Exam

Which life insurance policy pays its face amount at the end of a specified period if the insured is alive?

1. Term policy

2. Whole policy

3. Endowment policy

4. Universal life policy

The correct answer is: Endowment policy

An endowment policy is specifically designed to pay out its face amount after a designated period if the insured is still alive at that time. This type of policy combines a life insurance component with a savings element, providing both death benefits and a cash value that accumulates over time. At maturity, the policyholder receives the face amount, making it a popular choice for individuals who want the security of life insurance along with a guaranteed payout at a future date. In contrast, a term policy provides coverage for a specific term and pays a benefit only if the insured dies during that term, with no payout if they survive the term. A whole policy provides lifelong coverage and builds cash value but does not require a specific payout period; it pays upon death whenever it occurs. A universal life policy, while flexible and accumulating cash value, is also focused on long-term coverage and does not inherently guarantee a payout at a specified end date if the insured is alive at that time. Therefore, the defining characteristic of the endowment policy specifically addresses the question, making it the correct choice.