Types of Policies
A variable universal life policy keeps the same stated premium plan and mortality charge schedule, but the owner's selected stock subaccount falls sharply. Which policy element is directly changed first by that investment performance and can later affect whether charges can be paid?
Answer and explanation
Answer: D. Separate-account performance directly changes the VUL account value. That value is then relevant to whether ongoing policy charges can be supported, while mortality tables, compensation, and contractual guarantees are not the direct market-sensitive item.Source: SEC Investor.gov — Updated Investor Bulletin: Variable Life Insurance — Variable life insurance; account value varies with investment options; risks and fees
More types of policies questions
- A 20-year term policy allows conversion only during its first 12 years. What happens to the conversion privilege after year 12?
- A 20-year term policy permits conversion only during its first 12 years. Which statement correctly describes the feature?
- A 45-year-old buys an annuity intending to take income at 65. Which annuity classification describes the contract during those twenty years?
- A buyer wants a deferred annuity funded entirely with one lump-sum purchase payment. Which funding form should be selected?
- A buyer wants lifetime life insurance funded by one lump-sum payment and wants cash value available immediately. Which policy fits?
- A buyer wants permanent coverage whose credited values respond more quickly to current interest-rate changes than traditional whole life. Which product is the closest match?
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.