New Jersey Life Producer Practice Exam

If a 10-year family income policy is purchased effective April 1, 2007, how long will the beneficiary receive monthly income if the insured dies on August 1, 2007?

1. 5 years and 4 months

2. 9 years and 8 months

3. 10 years

4. 11 months

The correct answer is: 9 years and 8 months

In a family income policy, the beneficiary is entitled to receive monthly income for a specified period of time following the death of the insured. In this scenario, a 10-year policy was purchased effective April 1, 2007. If the insured dies on August 1, 2007, the beneficiary will start receiving monthly income from the date of death. To calculate the duration of the income payments, we first determine how many years and months remain in the policy period as of the insured's date of death. Since the policy lasts for 10 years, we consider the time from August 1, 2007, until the policy's expiration. From August 1, 2007, to April 1, 2017, is a total of 9 years and 8 months. The beneficiary will continue to receive the income payments for this entire duration. Therefore, the beneficiary will receive monthly income for 9 years and 8 months, confirming the correctness of the answer given.