New Jersey Life Producer Practice Exam

Question: 1 / 400

How is the death benefit of a life insurance policy determined?

It is fixed and does not change over time

It is based on the policy’s face amount and any additional riders or endorsements

The death benefit of a life insurance policy is determined primarily by the policy’s face amount, which is the amount specified in the policy that will be paid out upon the insured's death. In addition to the face amount, any additional riders or endorsements that may have been added to the policy can also affect the total death benefit. For example, riders for accidental death or accelerated benefits due to terminal illness can increase the amount paid out to beneficiaries under certain circumstances.

The face amount is agreed upon when the policy is purchased and typically remains constant unless the policyholder makes changes such as increasing coverage or adding new riders. This is why the option that states it is based on the policy’s face amount along with any relevant supplemental features accurately captures how the death benefit is ultimately determined.

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It varies based on the insured's age at death

It is calculated based on the total premiums paid

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