Types of Policies
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?
Answer and explanation
Answer: D. Indexed universal life ties interest to an external index but includes a guaranteed minimum interest rate; the policy terms control the floor.Source: National Association of Insurance Commissioners — Life Insurance — Universal Life Insurance > indexed universal life insurance; guaranteed minimum interest rate
More types of policies questions
- An owner buys a $100,000 ordinary whole life policy. How do cash values accumulate over the life of the policy?
- An owner of a flexible-premium deferred annuity wants to know if they can continue making purchase payments in the future. Which statement is most accurate?
- As an ordinary whole life policy matures over time and cash values increase, what happens to the insurer's net amount at risk?
- At what point does a standard ordinary whole life policy reach its ultimate maturity date?
- Before buying variable life, an applicant wants authoritative product-specific details about fees, investment options, and death-benefit features. Which document should the applicant request?
- Compared with standard level term for the same face amount, how does return-of-premium term usually price the added refund feature?
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