Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

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Multiple Choice

In decreasing term insurance, which policy component decreases over time?

Cash surrender value

Policy term length

Premium amount

Face value (death benefit)

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Verified step by step guidance

Understand the concept of decreasing term insurance: This type of insurance is designed to provide coverage that decreases over time, typically aligned with a decreasing financial obligation, such as a mortgage.

Identify the components of an insurance policy: Common components include the face value (death benefit), cash surrender value, policy term length, and premium amount.

Analyze the given options: In decreasing term insurance, the face value (death benefit) decreases over time, while other components like the premium amount, policy term length, and cash surrender value remain constant or are not applicable in this type of policy.

Clarify why the face value decreases: The face value is structured to reduce in alignment with the insured's decreasing financial obligations, ensuring the policy remains relevant to their needs.

Conclude that the correct answer is the face value (death benefit), as it is the policy component that decreases over time in decreasing term insurance.