Tennessee Insurance Practice Exam

When does a term life insurance policy typically mature?

1. Upon the beneficiary's request

2. Upon the insured reaching a specific age

3. When the insured dies during the policy term

4. At the end of the specified term

The correct answer is: When the insured dies during the policy term

A term life insurance policy is designed to provide coverage for a specified period, which could range from a few years to several decades. The policy matures, or is paid out, when the insured individual dies within that defined term. This means that if the insured passes away while the policy is active, the beneficiary will receive the death benefit as outlined in the policy. In cases where the insured survives the entire term, the policy does not pay out any benefits, and no further obligations exist unless the policy is renewed or converted into a permanent policy, which is usually dictated by the terms of the insurance agreement. Thus, the foundational purpose of a term life insurance policy centers on providing a financial safety net in the event of an untimely death during the specified term.