Question 22

The policy has matured.

When the cash value accumulation of a policy equals the face amount, we can say the policy has matured, indicating that the policyholder can access the full value of the insurance.

A) Has expired.

This option is incorrect because expiration typically refers to the end of the policy term without any benefits being paid out. A policy that has matured does not indicate expiration but rather that it has reached a stage where the cash value equals the face amount.

B) Has matured.

This option is correct as it accurately describes the situation where the cash value of the policy equals the face amount. At this point, the policyholder can typically access the full value, signifying that the policy has fulfilled its financial obligations.

C) Is a term life policy.

This option is incorrect because term life insurance provides coverage for a specific period and does not accumulate cash value. Therefore, it cannot mature in the sense of cash value equaling the face amount.

D) Is a limited-pay policy.

This option is incorrect as a limited-pay policy allows the policyholder to pay premiums for a limited time while still providing coverage for a lifetime. The cash value accumulation does not directly relate to the type of policy it is, but rather to the maturity phase of a whole life or similar policy.

Conclusion

The correct answer is that the policy has matured, as this indicates the point at which the cash value equals the face amount. All other options fail to accurately describe the implications of cash value accumulation in a life insurance policy, focusing instead on aspects that do not pertain to the concept of maturity in this context.