Types of Policies
A policyowner’s income varies and the owner wants to adjust premium timing within policy limits while keeping permanent coverage. Which product feature most directly addresses that need?
Answer and explanation
Answer: D. Universal life generally permits flexible premium timing and amounts within contract limits, provided enough value is available to cover policy charges. Ordinary whole life typically follows a set schedule, while the term choices do not supply this permanent flexible-premium structure.Source: NAIC — Life Insurance Buyer’s Guide — PDF page 5, Compare the Different Types of Insurance Policies > Whole Life vs. Universal Life
More types of policies questions
- In variable life insurance, what most directly causes the policy’s cash value to fluctuate?
- Most modern fixed annuity contracts allow what penalty-free withdrawal percentage annually during the surrender charge period?
- To what external benchmark is the interest crediting rate of an equity-indexed life insurance policy tied?
- Two business owners need one life policy to provide funds when the first of them dies. Which policy trigger is required?
- Two business partners purchase a joint life policy to fund a buy-sell agreement. Partner A dies. What happens to the policy after the death benefit is paid?
- Under a fixed indexed annuity’s basic index-crediting structure, what interest is added for an index term with a negative result?
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