A family policy provides life insurance coverage on the breadwinner (typically whole life) plus:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A family policy combines coverage in one contract: the primary insured (usually the breadwinner) is covered by a permanent whole life policy, and the spouse and children are covered by smaller amounts of term insurance attached to the same policy. It is a special coverage design used to protect an entire family economically through a single policy. This is distinct from a survivorship policy (which pays on the second death of two insureds), a return-of-premium design, and from issuing each family member a separate individually underwritten policy, which would lose the economy and convenience of the family package.
Why the other options are wrong
- B) Paying the death benefit only after the second insured dies describes a survivorship (last survivor) policy, which is designed mainly for estate tax liquidity. A family policy is a different design that does not wait for the second death.
- C) Refunding premiums if the insured survives a period is the return-of-premium feature of some term policies. That feature is unrelated to the family coverage design described in the question.
- D) A family policy does not require separate underwriting and separate policies for each member. It packages the breadwinner’s permanent coverage with smaller term amounts on the spouse and children under one contract.
Memory hook
Family policy = one contract, three generations covered. Breadwinner whole life, spouse and kids ride along on term.