Types of Policies
A client wants flexible premiums and an adjustable death benefit, but also wants to place policy value in equity and bond portfolios and accepts that those values can rise or fall with market performance. Which explanation best distinguishes the product from non-variable universal life?
Answer and explanation
Answer: C. The flexible-premium and adjustable-coverage mechanics point to universal life. The distinguishing variable feature is the owner's allocation to separate-account investment options, where performance is not guaranteed.Source: SEC Investor.gov — Updated Investor Bulletin: Variable Life Insurance — Variable life insurance; investment options and separate accounts; investment risk
More types of policies questions
- An annually renewable term policy is renewed for another year. What happens to the premium and to the evidence of insurability?
- An annuitant wants lifetime income but also wants payments guaranteed for at least 15 years if death occurs early. Which payout basis addresses both goals?
- An annuity buyer wants to select investment subaccounts and accepts that poor performance could reduce contract value below contributions. Which annuity is the direct match?
- An annuity owner wants income payments for as long as the owner lives, without adding a spouse or a minimum payment period. Which payout basis matches that request?
- An equity-indexed policy has an 80% participation rate and a 10% cap. If the underlying index grows by 15% in a policy year, what interest rate is credited?
- An indexed universal life policy's referenced index has a negative result for the crediting period. Which contract feature should the owner examine to determine the lowest credited rate?
590 Texas questions like this one.
Every answer explained, the ones you miss come back on a spaced schedule, and a plan built from your exam date.