Life Insurance Policies
How does the cash value of a continuous premium whole life policy behave over time?
Answer and explanation
Answer: A. Early cash values are small because acquisition costs are met first, after which the reserve accumulates steadily toward the face amount at the maturity age. Values that move with investment results belong to variable and universal designs.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, whole life cash value growth
More life insurance policies questions
- A variable universal life owner pays only minimal premiums while the selected separate-account options lose value. Monthly cost-of-insurance and expense deductions continue. What is the main near-term risk if the owner makes no change?
- 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?
- An annual renewable term policy keeps the same death benefit for each one-year term. What normally happens to its premium from year to year?
- An eligible employee declines the contributory plan at first, then applies to join two years later. What may the insurer require?
- An employee leaving a job asks whether to convert the group cover or buy an individual policy. What should be considered first?
- An employee's group cover ends and the employee dies eighteen days later, having applied for no individual policy. What does section 3220 provide?
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