The correct answer is: A. Premiums must be paid for least 2 consecutive years.
A guaranteed surrender value is a minimum amount of money that an insurance company will pay back to a policyholder if they surrender their policy before the end of the term. The amount of the guaranteed surrender value is usually based on the amount of premiums that have been paid, the length of time the policy has been in force, and the age of the policyholder.
In the United States, the Life Insurance Association of America (LIAA) has established a standard that requires life insurance companies to offer a guaranteed surrender value after two years of continuous premium payments. This means that if a policyholder surrenders their policy after two years, they will receive at least a portion of the premiums that they have paid, even if the policy has not yet reached its full maturity value.
The LIAA’s standard is not a legal requirement, but most life insurance companies follow it. However, there are some companies that offer a guaranteed surrender value after only one year of continuous premium payments, and there are others that do not offer a guaranteed surrender value at all.
It is important to check the terms of your life insurance policy to see if it includes a guaranteed surrender value. If it does, you will be able to get some of your money back if you need to surrender your policy before the end of the term. However, if your policy does not include a guaranteed surrender value, you may not get anything back if you surrender it early.
Here is a brief explanation of each option:
- Option A: Premiums must be paid for least 2 consecutive years. This is the correct answer, as it is the minimum requirement set by the LIAA.
- Option B: Premiums must be paid for least 3 consecutive years. This is a longer requirement than the LIAA’s standard, and it is not required by law.
- Option C: Premiums must be paid for least 4 consecutive years. This is an even longer requirement than Option B, and it is not required by law.
- Option D: Premiums must be paid for least 5 consecutive years. This is the longest requirement of the four options, and it is not required by law.