Question

In what scenario might an Endowment insurance be used for repaying a loan?

a.

When the borrower pays off the loan principal gradually

b.

When the borrower takes out an interest-only loan

c.

When the borrower receives a lump sum payment at maturity

d.

When the borrower chooses a decreasing term insurance coverage

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (b).When the borrower takes out an interest-only loan Explanation:An Endowment insurance might be used for repaying a loan when the borrower takes out an interest-only loan.

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Q. In what scenario might an Endowment insurance be used for repaying a loan?
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