Question 5

Face amount is paid if the insured survives to the end of the policy period.

In term life insurance policies, the face amount is only paid out if the insured dies during the policy period. If the insured survives the term, no benefit is paid, making this statement incorrect.

A) Insured can choose the premium payment mode.

This statement is correct as term life insurance policies often allow the insured to select from various premium payment modes such as monthly, quarterly, or annually. This flexibility is a common feature of many insurance products.

B) Insured must answer medical questions on the application.

This option is also correct. Most term life insurance applications require the insured to answer medical questions to assess their health and determine eligibility and premium rates. This process is standard practice in the industry.

C) Face amount is paid if the insured dies during the policy period.

This statement is accurate and reflects the primary function of term life insurance. The policy provides a death benefit to the beneficiaries if the insured passes away within the specified term, which is a fundamental aspect of this type of insurance.

D) Face amount is paid if the insured survives to the end of the policy period.

This statement is incorrect. Unlike permanent life insurance, term life insurance does not pay out any benefit if the insured survives the term. The policy expires without value if not claimed due to death.

Conclusion

The correct answer is option D, as it misrepresents the nature of term life insurance, which only pays out upon the insured's death within the policy duration. Options A, B, and C correctly describe features and functions of term life insurance, confirming that D is the only statement that does not hold true.