Types of Policies
A prospect wants permanent insurance with adjustable policy elements and cash value allocated to insurer-managed separate-account investments. Which product is the best fit?
Answer and explanation
Answer: D. Variable universal life is a universal life form that places funds in a separate account, combining universal-life flexibility with investment performance exposure. Whole life lacks owner-selected separate-account investment risk, term has no cash-value structure, and an annuity is not the requested life policy.Source: NAIC — Life Insurance — Universal Life Insurance, including variable universal life separate-account discussion
More types of policies questions
- How does a life annuity with 10-year period certain settlement option protect beneficiaries?
- How does the death benefit of an increasing term rider or policy change over time?
- How does the premium for a joint life (first-to-die) policy compare to buying two separate individual policies of the same face amount?
- How is interest credited to cash values in an interest-sensitive whole life policy?
- How is single-premium whole life ordinarily funded?
- How is the payout phase (annuitization) structured under a straight life income annuity settlement option?
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