Life Insurance Policy Provisions, Options, and Riders
How does a partial withdrawal differ from a policy loan on a universal life policy?
Answer and explanation
Answer: D. A withdrawal takes money out of the account value for good and usually reduces the death benefit, while a loan leaves the value in place as security and can be repaid. Withdrawals carry no repayment obligation and no interest charge.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, withdrawals and partial surrender
More life insurance policy provisions, options, and riders questions
- How does waiver of cost of insurance differ in effect from waiver of premium on a fixed whole life policy?
- How is a children's term rider ordinarily priced and applied?
- How is the amount of cover under a family term rider usually expressed?
- How is the interest credited under the accumulation at interest dividend option treated for tax?
- How is the interest paid under the interest only settlement option treated for tax?
- How is the lump sum paid under the cash settlement option treated for federal income tax?
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