Compare a $100,000 20 year endowment policy to a 20 year limited payment lfe policy which statement is?
incorrect?
1 The cash values should be about the same at the end of 20 years
2 Different premium paying periods are 20 years
3 The premiums paying periods are 20 years
4 Same death benefits would be paid during the first 20 years.
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Sounds like a homework question.
Actually, I don't think any company in the US sells 20 year endowment any more, but if a company did, the answer is:
Statement 1 is incorrect. The endowment policy has a cash value equal to its full death benefit at the end of 20 years. The 20 year limited payment life policy has a cash value at the end of 20 years equal to the value of a fully paid-up life insurance policy (which is LESS than the full death benefit).
Statement 2 appears to be written incorrectly. I assume it should say (in effect): "The cash values are different. The premium paying periods for both policies are 20 years." This is true.
Statements 3 and 4 are true as written.
Answers:
Ok,this sounds ok....