International Baccalaureate (IB) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the International Baccalaureate Exam with comprehensive quizzes including multiple choice questions and detailed explanations to boost your confidence. Hone your skills with our expertly crafted materials!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which of the following statements about life insurance is true?

Term life insurance should be avoided because the policy will expire and it has no savings plan built into it.
Cash value insurance is normally for life and is more expensive than term life insurance because it funds a savings plan.
There is no difference between term and cash value life insurance.
You will always need life insurance.

The correct answer is: Cash value insurance is normally for life and is more expensive than term life insurance because it funds a savings plan.

The statement about cash value insurance being normally for life and more expensive than term life insurance because it funds a savings plan is accurate. Cash value insurance, such as whole life or universal life insurance, combines a life insurance policy with a savings component that builds cash value over time. This dual benefit makes cash value insurance more expensive than term life insurance, which only provides death benefits without accumulating cash value. Term life insurance, on the other hand, is intended for a specific period and is generally less costly because it does not include a savings component. While term life insurance can provide financial protection during specific life stages or needs, it ultimately expires with no payout if the policyholder survives the term. The nuances between term and cash value insurance highlight the importance of understanding one's financial needs and goals when choosing a life insurance policy.