Types of Policies
A client rejects separate-account market risk and also does not want required premiums later recalculated under a current-assumption design. The client wants whole life with required fixed premiums, but with extra credited interest, when available, improving values or helping future premiums. Which design best fits?
Answer and explanation
Answer: B. Excess interest whole life keeps fixed required premiums like traditional whole life while allowing excess interest credits to improve cash values or help pay future premiums. That differs from current-assumption premium recalculation and from VUL separate-account risk.Source: New York Department of Financial Services — Life Insurance Information for Consumers — Interest Sensitive Whole Life > Excess Interest Whole Life; Current Assumption Whole Life
More types of policies questions
- An individual purchases a life insurance policy that provides coverage for exactly one year. At the end of the year, the policyowner can renew the coverage without proving insurability, but the premium will increase based on their attained age. What type of policy is this?
- An insured buys convertible term at age 30 and converts it to permanent insurance at age 40. Which age generally determines the new premium?
- An insured develops a health condition halfway through a 20-year level term policy. What happens to the fixed death benefit and premium specified for that term?
- An insured outlives a return-of-premium term policy, and no death benefit was paid. What feature may then apply according to the contract?
- An insured’s health deteriorates during a renewable term policy. At the end of the term, which feature is most valuable?
- An insured's health worsens before a renewable term policy expires. The renewal right is still available. Which outcome best reflects that feature?
590 Texas questions like this one.
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